Markets
Bitcoin extends decline after one of the worst weeks of 2024 for cryptocurrencies
(Bloomberg) — Losses are piling up in the cryptocurrency market after the second-worst weekly decline of 2024, a reflection of cooling demand for Bitcoin exchange-traded funds and uncertainty over monetary policy.
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A gauge of the 100 largest digital assets fell about 5% in the seven days through Sunday, the steepest drop since April, data compiled by Bloomberg showed. Bitcoin lost 4% to trade at $61,153 at 11.44am on Monday in London, its lowest in more than a month. The leading token by market value has been hit by a six-day streak of outflows from dedicated US ETFs.
Adding to fears of increased selling pressure, the trustee for the rehabilitation of Mt. Gox, the Japanese cryptocurrency exchange that was hacked more than a decade ago, announced that it would begin redemptions of Bitcoin and Bitcoin Cash at July.
“Given the Mt Gox announcement, it appears that there are market participants shorting,” Stefan von Haenisch, head of trading at OSL SG Pte. “Cryptocurrency markets are struggling to catch a bid at the moment.”
The cracks in the cryptocurrency sector arise amid doubts over the Federal Reserve’s ability to quickly cut interest rates from a two-decade high. For some analysts, the retreat in digital assets is a warning sign for broader risk appetite.
The current cryptocurrency market dynamic is “characterized by low volatility, weak volumes, and orders that go out of balance when prices begin to move to the edges of their range,” David Lawant, head of research at FalconX, wrote in a note.
The declines in some corners are particularly notable: the streak of weekly declines for Ether and Solana is the longest since last year and 2022, respectively.
This is just as fund companies prepare to launch the first US ETFs that invest directly in Ether, the second largest cryptocurrency. Solana, meanwhile, has recently been a favorite among a variety of digital asset hedge funds.
Bitcoin hit a record high of $73,798 in March, but has lagged behind traditional investments such as stocks, bonds and gold this quarter. According to Tony Sycamore, market analyst at IG Australia Pty, the 200-day moving average at around $57,500 is now in focus as a possible support zone for the price.
“It looks like a bearish climate is shaping up,” said Caroline Mauron, co-founder of digital asset derivatives liquidity provider Orbit Markets. “The market has difficulty digesting any large sell orders.”
The story continues
–With assistance from Suvashree Ghosh.
(Updates with Mt. Gox news in third paragraph.)
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