Bitcoin Slides Below $64,000 Amid Declining Network Activity and Investor Withdrawals
Summary:
Bitcoin (BTC) saw a drop below $64,000 for the first time in over a month on June 21, with an intra-day low of $63,451. The largest crypto by market cap was down 3.54% in 24 hours with the overall crypto market also declining. This drop was attributed to multiple factors including a decrease in demand due to falling network activity, apprehensive investors withdrawing their capital from Bitcoin ETFs, and bearish trend due to Bitcoin's failure to break the resistance at $72,000.
On June 21, Bitcoin (BTC) took a dip under $64,000 - a first in over a month. As per the data from Cointelegraph Markets Pro and TradingView, there was a plummet from an opening of $64,840 to $63,451 over the day. Bitcoin last saw a price lower than $64,000 on May 15, when it climbed from $61,299 to make a high of $71,980 on May 21, propelled by the enthusiasm surrounding the Ethereum ETF approval. At time of the report, BTC's value was $63,552, reflecting a 24-hour fall of 3.54%. The overall crypto market cap also fell by 3.24% in the same time frame to $2.33 trillion, while Ethereum (ETH) saw a drop of 2.25% at $3,475.
Now, let us delve into some factors causing Bitcoin to spearhead the market correction. One issue is the dragging weight of bitcoin ETFs on the BTC price as some apprehensive investors withdraw their capital. Spot Bitcoin ETFs in the US recorded outflows for the fifth day running on June 19, resulting in a total outflow of $900 million over the week - the most substantial since late April. According to SoSoValue, a crypto research platform, the 11 listed ETFs lost roughly $140 million on June 20.
Grayscale's GBTC led the outflow with $53.1 million, closely trailed by Fidelity's FBTC at $51.1 million. The VanEck ETF reported net outflows of $4 million whereas both Invesco and Galaxy Digital funds saw a net outflow of $2 million. BlackRock's IBIT, which has the largest ETF by assets held, was the only one to see net inflows which came to a total of $1.5 million. Other funds from ARK Invest, Valkyrie, Franklin Templeton, WisdomTree, and Hashdex reported no flows. The total trading volume of Spot Bitcoin ETFs came to $1.16 billion on June 20, down from June 18's $1.7 billion.
The recent drop in demand due to decreased network activity could be another reason behind the bearish Bitcoin trend. Glassnode data suggests that the daily activity on the Bitcoin network dropped from 971,789 addresses on April 4 to 632,620 on June 20, demonstrating a 35% decline over the previous 90 days.
Analyst Ali Martinez noted a downturn in exchange-based on-chain activity on the Bitcoin blockchain which suggested diminished investor interest in BTC and less network utilization.
From a technical standpoint, Bitcoin's price downgrade aligns with a larger correction that started when it was turned away from the $72,000 resistance level on June 7. BTC has fallen through important support levels, including the 50-day and 10-day exponential moving averages (EMAs), which are currently at $66,724 and $66,594, respectively.
As of the time of the report, BTC's price was sinking below the support provided by the 200-day EMA, accompanied by a 15% uplift in daily trading volumes. On the contrary, the key levels to monitor are $60,000 and the $56,500 low swing.
This article does not offer investment advice or recommendations. All investment and trading actions carry inherent risk, and individuals should carry out their research prior to making any decisions.
Published At
6/21/2024 9:31:25 PM
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