Markets
Why is the crypto market bearish today? Analyzing Key Factors
Most major cryptocurrencies have witnessed increased volatility this week as a wave of market news floods investors with uncertainty. Since the beginning of the week US CPI and PPI data, negative inflows into spot ETFs and capitulation by Bitcoin miners, crypto investors faced a series of developments that sent the price of BTC to a four-week low of $65,078. Will this correction be extended to the second half of June?
Bitcoin Faces Bearish Pressure Amid Long-Term Miner Capitulation and Liquidation
Source-Trading view
Over the past three months, Bitcoin price has traded sideways, resonating within two parallel trendlines on the daily charts. On June 7th, BTC Price witnessed its latest reversal from overhead resistance at $71,000, advancing 8.37% to $66,114.
The decline was initially accelerated by Pre-CPI data uncertainty among traders, who were unable to recover despite lower-than-expected inflation.
According to recent data from Coinglass, Bitcoin investors have experienced a notable long sell-off over the past four days. The notable green bars on the Total Settlements Chart show that buyers faced a $163.8 million sell-off, which accelerated the bearish momentum.
Currently, the Capitulation of BTC miners is among the main factors contributing to falling prices. According to a recent tweet from CryptoQuant CEO Ki Young Ju, the 18-month upward trend in Bitcoin hashrate has been halted, suggesting a possible capitulation by miners. This decline in hashrate suggests that miners will abandon BTC to cover operating costs after the fourth halving.
Reversal pattern emerged as Bitcoin ETFs saw significant outflows
Furthermore, the spot Bitcoin ETFs have witnessed net outflows on four of the last five days this week. On Friday, spot ETFs saw a substantial outflow of $190 million, indicating a cautious approach by investors amid the current correction trend.
On June 14, Bitcoin spot ETFs saw an outflow of $190 million. There were net outflows on four of the last five days. The Grayscale ETF GBTC had an outflow of $52.3448 million, and the BlackRock ETF IBIT had an inflow of $1.4899 million. https://t.co/npjWVH3bMi
— Wu Blockchain (@WuBlockchain) June 15, 2024
An analysis of the daily chart shows that the price of Bitcoin has developed a bearish double top pattern utilizing supply pressure at the ceiling of $71,000. This chart pattern commonly observed at major and local market tops indicates renewed selling pressure among investors following a substantial rally.
With a drop of 1.1% on Friday, the BTC Price broke the $66,730 neckline support and 50-day EMA slope. The daily RSI slope has also fallen below the 50% midline, indicating that forward market sentiment is turning bearish. If the collapse continues, sellers could lead another 6.5% decline to reach the $61,500 mark.
Even with this potential drop, the main digital asset remains above the healthy withdrawal level of 23.% indicating that the buyer maintains firm control over this asset.
Final conclusion:
Bitcoin price is just 10% below the all-time high of $73,750. According to the record, 20-30% is still normal for the volatile asset BTC, allowing it to regain depleted bullish momentum. This broader trend remains positive and the current correction allows investors to look for downside opportunities.
Read too: Crypto Markets Continue to Fall as Institutions Accumulate ETFs: Who Is Selling BTC?