Key Points
- Bitcoin’s price briefly dropped below $65K, triggering significant crypto liquidation, primarily affecting long traders.
- US-based spot Bitcoin ETFs have seen notable cash outflows following the recent hawkish Fed meeting.
The price of Bitcoin (BTC) saw a brief dip below $65K, which led to a significant liquidation in the crypto market. The largest cryptocurrency by market cap had a bearish start to Tuesday, dipping as low as $64K in the early Asian session. It has since stabilized around $65,600 during the London session. This drop resulted in a substantial liquidation in the crypto market, with long traders being the most affected.
Data from CoinGlass reveals that out of the $464 million liquidated in the leveraged crypto market, approximately $402 million involved long traders. The increased volatility in the crypto market has pushed more traders and investors towards stablecoins. The high daily average trading volume of over $63 billion in USDT alone is higher than that of Bitcoin and Ethereum combined.
Spot Bitcoin ETFs Cash Outflows
Spot Bitcoin ETFs in the United States have seen significant cash outflows recently, following a hawkish Federal Reserve meeting. On Monday, these ETFs registered a total cash outflow of about $145 million.
Fidelity’s FBTC and Ark’s ARKB were the most affected, with outflows of about $92 million and $50 million respectively. Other spot Bitcoin ETFs, like the BlackRock-backed iShares Bitcoin Trust (NASDAQ: IBIT), saw zero net cash flow on Monday. The decrease in spot Bitcoin cash inflows and the low levels of active addresses have led to a bearish short-term outlook for most traders.
Future of BTC Price
Bitcoin’s price has struggled to rally above $72K in the past four months, indicating a likely continuation of the bearish outlook until the bulls regain control. From a technical standpoint, Bitcoin’s price could find solid support between $57K and $61K in case of further capitulation.
Crypto analyst Credibull Crypto suggests that the bottom for the ongoing Bitcoin correction is likely in place, and a market rebound is expected in the near term. However, for this to occur, Bitcoin’s price must consistently close above $67K to invalidate further market correction.
Long-Term Outlook
Analysts from Santiment suggest that the increased negative sentiment towards the altcoin industry could provide an opportunity for patient traders to buy the dip in anticipation of a parabolic rally. The listing of spot Ether ETFs in the United States, expected in July, has led to an increase in the number of unique addresses in the Ethereum ecosystem.
The highly anticipated Altseason could be triggered by a reversal in Bitcoin dominance, which currently stands at approximately 56.18 percent.
