Cryptocurrencies

The total market capitalization of cryptocurrencies decreased by 3.9% between June 20 and 21.

The total cryptocurrency market capitalization fell 3.9% between June 20 and 21, closing in on a five-week low of $2.34 trillion. This drop affected all top 10 coins, with Bitcoin (BTC) falling 4.2%, Ethereum (ETH) suffering a 4% loss, and Binance Coin (BNB) facing a 4.2% correction. %. Despite some recovery after the day’s losses, the market remains bearish.

Total market capitalization of cryptocurrencies, 12 hours, in USD. Source: Commercial View

Selling pressure from Germany more than offset by buying BTC from MicroStrategy

Some analysts have suggested that the German government’s massive sell-off of Bitcoin caused the decline of the cryptocurrency market. However, this explanation ignores the fact that traditional financial investors reacted to unfavorable macroeconomic data. Traders fear that the stock market has peaked and the U.S. financial situation is worsening.

According to on-chain cryptocurrency analytics firm Arkham, a wallet linked to the German government transferred 6,500 bitcoins to exchanges on June 19, worth $425 million at the time. Arkham claims that the wallet contained approximately 50,000 bitcoins, which were allegedly siphoned from the pirate movie site Movie2k, which was operating in 2013. Evidence suggests that this entity sent bitcoins to Kraken, Bitstamp and Coinbase, leaving no doubt about its origin and status. Effective sales.

However, this theory is wrong as American business intelligence firm MicroStrategy revealed on June 20 that it had purchased an additional 11,931 Bitcoins for $786 million. Thus, MicroStrategy’s buying covered selling pressures, including a two-day net outflow of $292 million from US Bitcoin ETFs.

Since no other regulatory changes or events were able to negatively impact cryptocurrency investor sentiment over the past few days, it is worth focusing on the traditional financial sector, especially macroeconomic data . Despite the short-term correlation between the S&P 500 and the cryptocurrency sector, traders typically abandon risky positions during periods of uncertainty.

U.S. Futures and Options Expire and Global Macroeconomic Conditions Deteriorate

According to Bloomberg, the US stock market is experiencing “triple witching”, an event that occurs every quarter when derivative contracts linked to stocks, index options and futures are due to expire. The $5.5 trillion total is set to expire on June 21, and as the S&P 500 index nears an all-time high, investors worry that weaker macroeconomic data could signal growing recession risks.

Existing home sales in the United States fell for the third consecutive month in May, while manufacturing and services PMI figures in France and Germany came in below expectations. Similarly, in the UK, the PMI showed that private sector businesses grew slower than expected. Finally, the inflation rate in Japan reached 2.8% in May, higher than the 2.5% recorded in April.

Gennady Goldberg, head of U.S. interest rate strategy at TD Securities, said the U.S. debt ceiling, which has been suspended by Congress until early 2025, is likely to create confrontation and possibly lead to a further downgrade of the sovereign rating, according to Reuters. . “Five-year credit default swaps on U.S. sovereign debt indicate some concern,” Goldberg said.

about: Why did the price of Bitcoin fall today?

That bitter feeling was reinforced after retail data firm Syntun reported that China’s annual mid-year e-commerce festival saw sales fall for the first time in eight years. The event celebrates the creation of Chinese giant JD.com, which is the region’s second-largest website in terms of annual sales, according to CNBC. Total sales reached $102.3 billion in 2024, down 7% from 2023.

In this scenario, the US Dollar Strength Index (DXY) hit a fifty-day high of 105.85, signaling that investors are turning away from the Euro, British Pound, Swiss Franc and similar currencies . While the S&P 500 remained unchanged on June 21, traders saw Bitcoin’s 52% year-to-date gain in 2024 as a reason to take profits and reduce exposure amid macroeconomic uncertainty.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research before making a decision.

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