The crypto market is currently facing a major selloff, with Bitcoin leading the downturn as its price dropped to $62k, triggering losses across Ethereum and other altcoins. The total market capitalization has plummeted from $2.35 trillion to $2.26 trillion in the last 24 hours, causing investors to lose a staggering $160 billion in net wealth within a week.
Bear Conditions and Key Factors
Investor sentiment has shifted from extreme greed to neutrality, with the fear and greed index dropping from 76 to 51. Bitcoin’s price fell more than 3%, reaching a low of $62,258 amid ongoing selling pressure. Traders are eyeing the critical support level of $61,000, previously seen in April and May. Moreover, Market data from Coinglass shows $170 million in liquidations today, highlighting high volatility and risk aversion among traders. A significant order on BitMEX saw a whale sell XBTUSD worth $10 million, adding to market turmoil.
Altcoins Follow Suit
The downturn in Bitcoin has had a ripple effect across the cryptocurrencies, with Ethereum witnessing a 4% decline to $3,366 over the past 24 hours. This represents a monthly decrease of more than 10%, reflecting broader market weakness. Similarly, other major altcoins such as Solana, XRP, and Dogecoin have also experienced losses ranging from 3% to 6%. The sell-off has been particularly pronounced among meme coins and AI-driven cryptocurrencies like dogwifhat (WIF), which saw a significant 14% drop.
Double Trouble for Bitcoin
Analysts and market data highlight ongoing uncertainty ahead of key macroeconomic events such as US PCE inflation data and monthly options expiry. According to the 10x Research, there is a warning of a potential Bitcoin price drop to $50,000 due to the formation of a double top pattern and continuous outflows from spot Bitcoin ETFs.
10x Research notes that despite weaker CPI data, a breakout attempt failed three weeks ago in the market. They set a stop level at 67,000, but when breached, they adjusted their outlook due to weak money flow. Managing risk is crucial in trading fake breakouts and predicting market tops.
Caution Advised
Based on the research report, recent signals indicate caution, with Ethereum’s breach of key support levels and Bitcoin entering a downtrend. As Bitcoin approaches potential topping formations within the $60,000-$70,000 range, investors are urged to remain vigilant against further declines, which historically impact altcoins significantly. Crypto moves in parabolic up-cycles, and good risk management is key to success.
Upcoming Challenges
Looking ahead, the crypto market faces several challenges, including the expiry of 105,000 BTC options contracts worth $6.72 billion on June 28. This event, coupled with a put-call ratio of 0.52 and a max pain point at $57,000, suggests that Bitcoin could remain under selling pressure in the near term.
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