Bitcoin hits onemonth low as market experiences selloff raising potential opportunity
Bitcoin (BTC) has reached a low point after facing significant outflows from digital-asset investment products and concerns about elevated US borrowing costs impacting the cryptocurrency market.
The primary digital asset experienced a drop of up to 2.7% on June 18, hitting a level not seen since mid-May before bouncing back slightly to trade at $65,266. This decline brought Bitcoin below the crucial 50-day moving average support level, signaling a short-term downtrend in the crypto market.
Traditional asset classes like stocks and bonds have outperformed Bitcoin in the second quarter, with the cryptocurrency falling by about 5%. According to Bloomberg, global equities, fixed income, and commodities have all shown better returns than Bitcoin, hinting at a potential slowdown in the crypto market.
The latest report from CoinShares on weekly asset fund flows revealed $621 million in outflows from Bitcoin investment products, while short Bitcoin funds saw $1.8 million in weekly inflows. The outflows were attributed to the Federal Reserve’s hawkish stance, which suggests maintaining high interest rates for an extended period, diverting capital away from assets like Bitcoin with fixed supplies.
Despite Bitcoin’s decline, altcoins displayed resilience with significant inflows. Ethereum (ETH) investment products received $13.1 million, while Lido (LDO) and XRP Ledger (XRP) investment vehicles saw $2 million and $1.1 million in inflows, respectively. However, these inflows were not enough to offset the overall market outflows, causing total digital assets under management to drop from $100 billion to $94 billion during the week.
Institutional adoption of digital assets, particularly Bitcoin exchange-traded funds (ETFs) in the US, remains slow despite initial enthusiasm. All nine spot Bitcoin ETFs in the US recorded outflows of $208 million. Fidelity’s FBTC witnessed outflows exceeding $80 million, while Grayscale’s GBTC recorded outflows of over $60 million.
Blockchain analytics platform Santiment highlighted Bitcoin’s price slipping below $67,000, leading to a wave of liquidations in the crypto market. Despite concerns, Bitcoin currently stands above $64,500, prompting caution among traders and investors.
While the market experiences a downturn, the cyclical nature of the market suggests potential opportunities for long-term investors willing to navigate the volatility. The current market conditions should not be considered investment advice, as investing in cryptocurrencies carries inherent risks.