News
Bitcoin could collapse further! This is the only condition for a reversal of the trend.
Thu June 20, 2024 ▪ 3 min reading ▪ by Luc Jose A.
The storm continues to batter the bitcoin market, with massive outflows from spot ETFs shaking investor confidence. In one week, nearly $879 million left Bitcoin funds, casting doubt on the future stability of the leading crypto. According to experts, a key factor could reverse this worrying trend.
Bitcoin collapse: key figures to know
In the last days, bitcoin saw a notable decline, oscillating between $65,500 and $64,000. This instability is largely attributed to Net outflows from US spot Bitcoin ETFs, which reached nearly $300 million in just two days. Since the start of last week, these net outflows have totaled $879 million. The largest outflow was from Fidelity’s FBTC fund with $175 million, followed by Grayscale Investments’ GBTC fund with $65 million.
This selling trend among institutional investors intensified after the Federal Reserve took a more restrictive stance than expected. As a result, the price of Bitcoin has fallen 6% over the past seven days, shaking investor confidence. Derivatives traders also suffered losses, with liquidations close to $32 million in the past 24 hours, including $20 million in long positions.
Bitcoin trend reversal: the keys to a potential recovery
According to a note from the BRN trading desk, a Bitcoin trend reversal could occur if ETF inflows exceed outflows. Currently, the trend is more towards selling, which continues to put pressure on the price of bitcoin. BRN also highlights that Donald Trump’s pro-mining stance could benefit American miners, particularly with the adoption of more energy-efficient equipment.
Bitcoin miners also felt the pressure and sold their holdings to fund their operations and upgrade their equipment. The decrease in miner reserves, combined with a decline in hashprice and hashrate, suggests a reduction in overall mining power. BRN analysts note that if bitcoin falls below the $64,000 mark, it could trigger a premature bear market.
The Bitcoin market is at a critical juncture, with massive outflows of ETF funds and prolonged selling pressure. Investors remain cautious, watching for a potential catalyst for a trend reversal. Future developments will depend on miners and government policies. For now, the market remains volatile and investors should be cautious.
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Luc José A.
A graduate of Sciences Po Toulouse and holder of a blockchain consultant certification issued by Alyra, I joined the Cointribune adventure in 2019. Convinced of the potential of blockchain to transform many sectors of the economy, I took the commitment to raise awareness and inform the general public about this constantly evolving ecosystem. My goal is to enable everyone to better understand blockchain and seize the opportunities it offers. I strive every day to provide an objective analysis of current events, to decipher market trends, to relay the latest technological innovations and to put into perspective the economic and societal issues of this ongoing revolution.
DISCLAIMER
The views, thoughts and opinions expressed in this article belong solely to the author and should not be considered investment advice. Do your own research before making any investment decisions.