Markets
Falling Bitcoin Prices and Turbulence on Cryptocurrency Markets Intensify: Is Germany to Blame? — TradingView News
The total market capitalization of cryptocurrencies fell 3.9% between June 20 and 21, nearing a five-week low of $2.34 trillion. This decline affected all top 10 coins, including Bitcoin BitcoinUSD down 4.2%, Ether 
Germany’s selling pressure was more than offset by MicroStrategy’s purchase of BTC
Some analysts have suggested that a large Bitcoin sale by the German government caused the cryptocurrency market to decline. However, this explanation overlooks the fact that traditional financial investors have reacted to unfavorable macroeconomic data. Traders fear that the stock market may have peaked and that the US fiscal situation is weakening.
According to onchain crypto analytics firm Arkham, a wallet linked to the German government transferred 6,500 BTC to exchanges on June 19, worth $425 million at the time. Arkham claims the wallet contained nearly 50,000 BTC, believed to have been seized from pirated movie website Movie2k, which was active in 2013. Evidence suggests this entity sent BTC to Kraken, Bitstamp and Coinbase, leaving little doubt about its origin and actual sale.
However, this theory is incorrect because US-based business intelligence firm MicroStrategy revealed on June 20 that it had purchased another 11,931 BTC for $786 million. Thus, MicroStrategy’s purchase covered selling pressure, including the net outflow of $292 million in two days from US spot Bitcoin ETFs.
Given that no other regulatory changes or events could have negatively impacted cryptocurrency investor sentiment over the past couple of days, one should focus on the traditional financial sector, especially macroeconomic data. Despite the short-term correlation between the S&P 500 Index and the cryptocurrency sector, traders typically abandon risky positions during periods of uncertainty.
US futures and options expire and global macroeconomic conditions worsen
According to Bloomberg, the U.S. stock market is facing “triple witching,” an event that occurs every quarter when derivative contracts tied to stocks, index options and futures are scheduled to expire. A total of $5.5 trillion is due to expire on June 21, and as the S&P 500 approaches its all-time high, investors worry that weaker macroeconomic data points to a higher recession risk.
Existing home sales in the United States fell for the third consecutive month in May, while Manufacturing and Services Purchasing Managers’ Index (PMI) readings for France and Germany fell short of expectations. Similarly, in the UK, the PMI showed that private sector companies recorded slower growth than expected. Finally, Japanese inflation rose to 2.8% in May, higher than April’s 2.5%.
Gennadiy Goldberg, head of U.S. rates strategy at TD Securities, said the U.S. debt ceiling, suspended by Congress until early 2025, will create a stalemate and could trigger another U.S. credit rating downgrade, according to Reuters. sovereign credit. “5-year credit default swaps (CDS) on US sovereign debt indicate some concern,” said Goldberg.
Related: Why is the price of Bitcoin falling today?
The worsening sentiment was strengthened after retail data provider Syntun said China’s annual mid-year e-commerce festival saw a drop in sales for the first time in eight years. The event celebrates the founding of Chinese giant JD.com, which is the second largest in the region in terms of annual sales, according to CNBC. Gross sales reached $102.3 billion in 2024, a decline of 7% from 2023.
Against this backdrop, the US dollar index rose to its highest level in 50 days at 105.85, indicating that investors are moving away from the euro, British pound, Swiss franc and similar currencies. Although the S&P 500 Index was unchanged on June 21, traders have seen Bitcoin’s 52% year-to-date gains in 2024 as a reason to take profits and reduce exposure amid macroeconomic uncertainty.
This article does not contain investment advice or recommendations. Every investing and trading move involves risk, and readers should conduct their own research before making a decision.