In the past week, the cryptocurrency market has been turbulent, with mainstream value coins experiencing a prolonged downturn. The continuous liquidation of CRV and the ZK airdrop have left people feeling anxious. Today, as Bitcoin fell below $65,000, the cryptocurrency market once again welcomed “519”.
Even Ethereum, with ETF expectations, could not escape unscathed. According to OKX market data, Ethereum dropped below $3,400 with a 24-hour decrease of 6.23%. SOL, which relies on meme narratives, also struggled to regain its highs in this market, as it plummeted below $140 with a 24-hour decrease of 7.23%.
Following this, altcoins followed suit with a general decline in the market. WLD, a major target of AI speculation, fell below $3 with a 24-hour decrease of 16.3%. According to BlockBeats’ incomplete statistics, most altcoins experienced declines of over 20%, such as IO with a 24-hour decrease of 25.85%; USTC with a 24-hour decrease of 24.27%; KNC with a 24-hour decrease of 23.39%; BB with a 24-hour decrease of 23%; and NOT with a 24-hour decrease of 22.4%.
Coinglass data shows that in the past 24 hours, there has been a total of $318 million liquidated across the entire network, with long positions liquidated at $270 million and short positions liquidated at $48.106 million. The total cryptocurrency market capitalization has also decreased, dropping to $2.45 trillion with a 4.4% decrease in 24 hours, according to CoinGecko data.
Why the sudden drop again? The market has been unpredictable this year, with memes disrupting market sentiment and a fluctuating market trend, leaving analysts puzzled. However, the main reason for this recent decline continues to be the outflow of Bitcoin ETFs.
Starting last week, Bitcoin ETFs have shown a net outflow. According to Farside Investors data, as of June 15, the cumulative net outflow of U.S. Bitcoin spot ETFs amounted to $580.6 million.
Additionally, according to Lookonchain monitoring, yesterday, nine U.S. Bitcoin spot ETFs reduced their holdings by 3,169 BTC, with Fidelity reducing holdings by 1,224 BTC (-$80.34 million) and Grayscale reducing holdings by 936 BTC (-$61.40 million).
If ETFs were the treasure trove of this bull market, most funds attracted have remained within the Bitcoin ecosystem. The cryptocurrency world, led by Ethereum, still relies on value coins and memes. The current market trend of value coins can be described as “lax”, with PEPE leading the way and newcomers like WIF falling behind, while celebrity coin MOTHER has breached Ethereum’s defenses.
It seems that no new money has entered the cryptocurrency market, as the market value of stablecoins has remained around $160 billion for a long time. According to coinmarketcap data, the market value stood at $162.6 billion at the time of writing, with a 0.05% decrease in 24 hours.
Not only has there been no influx of new money, but funds appear to have flowed into other tech assets. NVIDIA’s stock price has hit new highs, surpassing $3 trillion in market value on June 5, overtaking Apple Inc. ($3 trillion). The market value increased by over $140 billion in just one day, with four of the past nine trading days seeing market value increases exceeding $100 billion.
With ETH performing poorly, will memes continue to grow?
The first “519” of this year occurred when Bitcoin broke through $69,000 to set a new all-time high, only to fall below $60,000 overnight, causing over $10 billion in liquidations across the network. The Bitcoin volatility index reached 78.81, close to its highest value in a year. However, the Bitcoin ETF daily trading volume set a new record at $10 billion, suggesting that the pullback was a normal retracement after the all-time high.
The second event occurred two months ago during the Bitcoin halving. Although there was a total liquidation of $9.35 billion across the network, Bitcoin’s retracement was not severe, at less than 10%. However, almost all altcoins led by ETH experienced a bloodbath in the cryptocurrency market.
Despite multiple general market declines, the previous retracements did not affect the overall bullish market sentiment. However, this time analysts seem to be wavering.
On June 14, CoinDesk reported that despite strong U.S. stocks and favorable U.S. cryptocurrency policies, traders expect a deeper retracement in the price of Bitcoin (BTC) in the coming weeks, mainly due to miner selling activities and widespread profit-taking. FxPro’s Senior Market Analyst, Alex Kuptsikevich, believes that “a new wave of strength in the dollar and a decreasing demand for stocks are emerging. Risk asset demand is gradually decreasing, leading to a downward trend in Bitcoin’s intraday highs.”
“Bitcoin continues to test the strength of the 50-day moving average, but cannot find enough reasons to further decline. Continuously testing lows allows shorts to quickly succeed, with the next target being $60,000,” he added.
Some observers suggest that miners, who provide a significant amount of computing resources to maintain the Bitcoin network, may be one of the selling groups. Analysts added, “The continuous increase in net outflows of Bitcoin by miners may not necessarily put pressure on Bitcoin prices. However, prices often stagnate.”
Furthermore, the outlook for Ethereum (ETH) also seems insufficient to convince analysts to be bullish on Ethereum.
On June 12, Matrixport officially stated that since the merger of PoW and PoS chains in September 2022, the ETH/BTC exchange rate has been on a clear downward trend. Although Ethereum occasionally briefly surpasses Bitcoin, this situation has not been sustained. As the exchange rate approaches the top of the downward channel