Cryptocurrency Market Faces Second-Worst Weekly Decline of 2024
The cryptocurrency market is reeling from its second-worst weekly decline of 2024, as demand for Bitcoin exchange-traded funds cools and uncertainty over monetary policy looms large. According to data compiled by Bloomberg, a gauge of the largest 100 digital assets fell about 5% in the seven days through Sunday, marking the steepest slide since April.
Bitcoin, the leading token by market value, dropped as much as 6.1% to $59,827 on Monday, dipping below the $60,000 mark for the first time since May 3. This decline comes on the heels of two weeks of outflows from exchange-traded products holding the cryptocurrency, adding to fears of increased selling pressure.
In a surprising development, the rehabilitation trustee of Mt. Gox, the Japanese crypto exchange that was hacked over a decade ago, announced plans to start repayments of Bitcoin and Bitcoin Cash in July. This news has led market participants to position themselves short, according to Stefan von Haenisch, head of trading at OSL SG Pte.
The current market dynamic is characterized by low volatility and soft volumes, with orderbooks becoming unbalanced as prices fluctuate. Analysts are viewing the retreat in digital assets as a warning sign for broader risk appetite, especially as doubts linger about the Federal Reserve’s ability to quickly cut interest rates from a two-decade high.
Despite preparations for the launch of the first US ETFs investing directly in Ether, the second-ranked cryptoasset, and Solana’s popularity among digital-asset hedge funds, both tokens have seen significant declines. Bitcoin, which hit a record high of $73,798 in March, is now trailing traditional investments like stocks, bonds, and gold this quarter.
As the market grapples with a bearish mood and struggles to digest large sell orders, Bitcoin investment products saw around $600 million in outflows for a second consecutive week. Overall, digital asset products experienced $584 million in outflows in the week ended June 21, with Bitcoin products accounting for the majority of the outflows.
The 200-day moving average at around $57,500 is now seen as a possible zone of support for Bitcoin’s price, according to IG Australia Pty Market Analyst Tony Sycamore. The crypto market’s future remains uncertain as it navigates through these challenging times.