The cryptocurrency market is currently experiencing a significant selloff, led by Bitcoin’s sharp drop to $62,000. This downturn has caused losses across Ethereum and other altcoins, resulting in the total market capitalization falling from $2.35 trillion to $2.26 trillion in the past 24 hours. Investors have collectively lost about $160 billion in wealth within a week.
Read on to unravel the reasons behind the selloff and see what experts predict for the future of the crypto market.
Are Investor Sentiments Shifting?
Investor sentiment has shifted from extreme greed to neutrality, with the fear and greed index dropping from 76 to 51. Bitcoin’s price has fallen more than 3%, reaching a low of $62,258 due to ongoing selling pressures. Traders are closely watching the critical support level of $61,000, previously observed in April and May.
Market data from Coinglass shows $170 million in liquidations today, highlighting high volatility and risk aversion among traders. Additionally, a significant sell-off on BitMEX saw a whale selling XBTUSD holdings worth $10 million, adding to market turbulence.
Altcoins Follow Suit
Bitcoin’s downturn has had ripple effects across the broader cryptocurrency market. Ethereum, for instance, dropped 4% to $3,366 in the last 24 hours, marking a monthly decline of more than 10%. Other major altcoins like Solana, XRP, and Dogecoin also recorded losses ranging from 3% to 6%. Meme coins and AI-driven cryptocurrencies like dogwifhat (WIF) saw significant drops, with dogwifhat plummeting by 14%.
Double Trouble for Bitcoin
Analysts and market data indicate ongoing uncertainty ahead of key economic events such as US PCE inflation data and monthly options expiry. According to 10x Research, there are concerns about Bitcoin potentially dropping to $50,000 due to a double top pattern and continuous outflows from spot Bitcoin ETFs.
Managing risk is crucial, especially in navigating volatile market conditions and identifying potential market peaks and false breakouts, as emphasized by 10x Research.
Caution Advised
As Ethereum breaches key support levels and Bitcoin enters a downtrend phase, investors are advised to proceed cautiously against further declines that historically affect altcoins significantly. Given the cryptocurrency market’s known cycles of rapid growth and correction, effective risk management remains essential for navigating uncertain times.
Looking ahead, the expiry of 105,000 BTC options contracts worth $6.72 billion on June 28 is anticipated to exert significant influence. Coupled with a put-call ratio of 0.52 and a max pain point set at $57,000, these factors suggest that Bitcoin could face continued selling pressure in the near term.
Investors are urged to stay informed and vigilant as market dynamics evolve.
Also Read: Institutional Investors Offload $690 Million in Bitcoin and Ethereum, Favor Altcoins
The crypto market is known for its wild swings. What are your predictions for the coming weeks?
