CoinDesk Report:
In the past 24 hours, the total market capitalization of the crypto market dropped by $91 billion.
Bitcoin, after a 12-hour long battle at $60,000, began a “waterfall” drop at 9:00 AM today, briefly dipping below $58,000 and revisiting lows from a week ago, marking a 5.72% decrease over 24 hours. At the time of writing, Bitcoin has recovered above $59,100.
Alongside Bitcoin, major altcoins also experienced widespread declines. Liquidations totaling nearly $100 million occurred within the crypto market in the past hour alone, half of which in the past 12 hours. Tokens within the Ethereum ecosystem such as LDO, ETHFI, and ENS saw declines ranging from 8% to 20.46%. Solana’s ecosystem also saw losses of around 15% for JTO, WIF, and TNSR.
Despite the recent lows, reasons for the downturn persist.
While the market has been in a slump for a month, the crypto community has accepted it as a “prolonged pullback bottom” phase. Bitcoin’s volatility has approached new lows since February, yet signals of continued decline remain.
David Lawant, research director at FalconX, noted in a report, “The current dynamics of the cryptocurrency market feature low volatility and weak trading volumes, leading to imbalances in order books as prices move towards range edges.”
Bitcoin spot ETFs serve as critical indicators for market direction. According to Farside Investors, Bitcoin ETFs have seen net outflows for two consecutive days, totaling $34.2 million.
Moreover, the absence of new capital inflows is a significant reason why the market struggles to meet expectations. Stablecoin total market capitalization has steadily grown since mid-last year, correlating with a bullish market then. However, since early May, with stablecoin market capitalization hovering around $160 billion for over two months, the lack of liquidity within the market has hindered upward momentum.
With sentiments remaining gloomy, is it time to buy?
A week ago, Bitcoin touched $58,000; now, it returns to this level. Is this a clearing of retracement or a sign of the bull market’s end? Market opinions diverge.
From a technical standpoint, Bitcoin’s RSI on the 4-hour and daily charts shows signs of bullish divergence, suggesting the price may have dropped too low in the short term. Today’s sell-off pressure may not exceed that of June 24, potentially setting the stage for a rebound.
With market sentiment overly pessimistic, could this be a buying opportunity? Analyst Ignas from the crypto community suggests Bitcoin’s price is artificially suppressed, influenced by deceptive large-scale sell orders to induce panic selling among retail and institutional investors.
Yesterday, CryptoQuant released a report indicating Bitcoin miners’ compensation has been “extremely low” since the halving, with transaction fee revenues accounting for only 3.2% of daily total revenues, the lowest in three months. With incentives waning, miners may gradually capitulate by shutting down underperforming equipment and selling Bitcoin to hedge risks, historically signaling Bitcoin nearing its bottom.
However, signals also suggest Bitcoin could continue to decline.
Looking at net flows of Bitcoin ETFs, Markus Thielen, founder of 10x Research, suggests the average entry price for Bitcoin ETF buyers is between $60,000 and $61,000. Thus, yesterday’s drop below $60,000 could trigger an ETF liquidation wave, further dragging down Bitcoin prices.
For instance, Thielen believes Bitcoin’s weekly and monthly reversal indicators suggest a broader retracement, potentially pushing prices further down to $55,000. Andrew Kang, co-founder of crypto venture firm Mechanism Capital, sees a bottom even lower, suggesting Bitcoin could undergo an extreme correction towards the $40,000 range.
Despite short-term fluctuations, confidence in Bitcoin’s long-term price remains. Standard Chartered Bank forecasts Bitcoin could reach a historical high in August and hit $100,000 during the U.S. presidential elections in November. Analysts from the bank further maintain targets of $150,000 by year-end and $200,000 by 2025 if Trump wins, reflecting confidence in Bitcoin’s future prospects. Tom Lee, co-founder of Fundstrat, also holds firm to his prediction of Bitcoin reaching $150,000.
“Making money is too hard,” “Sorry to the family”—these discussions have been commonplace in the community over the past month. For retail investors, this bull market has proven exceptionally challenging.