By Tom Blitzer
Key Insights:
- ETF outflows halt a five-day streak, impacting investor confidence in Bitcoin and contributing to a 3% market decline.
- Upcoming Bitcoin and Ethereum options expiry creates market uncertainty, influencing traders to adjust positions and driving volatility.
- Potential delay in Ethereum ETF approval fuels investor concerns, adding to the recent crypto market selloff and heightened market sensitivity.
The global crypto market cap witnessed a more than 3.5% decline today, sparking considerable discussions among investors and analysts. Major cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH), Dogecoin (DOGE), and Shiba Inu (SHIB), have experienced notable price drops. In the last 24 hours, the market has seen a liquidation of over $163 million.
Bitcoin ETF Outflows Trigger Investor Concerns
A key factor in the recent market downturn is the outflow from U.S. Spot Bitcoin ETFs. After five consecutive days of inflows totaling $129.5 million by July 1, the trend reversed on July 2 with an outflow of $13.7 million. This shift has affected market sentiment, suggesting a pause in institutional interest.
Despite some positive inflows from BlackRock IBIT and Fidelity’s FBTC, the significant outflow from GrayScale has negated these gains. This reversal has left investors seeking clarity on market momentum, reflecting cautious behavior amid recent volatility.
Impact of Upcoming Options Expiry
The upcoming expiration of significant Bitcoin and Ethereum options has also contributed to market volatility. Data from Deribit indicates that Bitcoin options worth over $1.04 billion, with a put/call ratio of 0.80, are set to expire on July 5. Similarly, Ethereum options valued at $479.30 million, with a put/call ratio of 0.38, will also expire on the same day.
These impending expiries create uncertainty, influencing traders to adjust their positions in anticipation of potential market shifts. The options expiry has heightened market sensitivity, leading to cautious trading behavior.
Potential Delay in Ethereum ETF Launch
Investor sentiment has also been affected by potential delays in the approval of the U.S. Spot Ethereum ETF. The market was anticipating approval from the U.S. Securities and Exchange Commission (SEC) this week. However, reports suggest that the launch may be delayed until mid-July.
This delay has sparked concerns among investors, further contributing to the recent market selloff. Despite these challenges, some market analysts remain optimistic about the crypto market’s future performance, expecting potential gains following the approval of the Ethereum ETF.
Extensive Liquidation Across the Crypto Market
The recent selloff has led to substantial liquidations, with CoinGlass data showing over $163 million liquidated in the past 24 hours. Approximately 45,000 traders were affected, with the largest single liquidation occurring on OKX for an ETH-USDT-SWAP worth $3.36 million.
Bitcoin faced liquidations totaling $34.74 million, while Ethereum saw $32.87 million in liquidations. The decline in the value of major cryptocurrencies has raised concerns, but some analysts believe the market could recover in the coming days, particularly with the anticipated Ethereum ETF approval.
As of the current update, Bitcoin has dropped below the $60,000 mark, contributing to a sense of fear, uncertainty, and doubt (FUD) in the market. Ethereum has declined nearly 3% in the last 24 hours, while Dogecoin and Shiba Inu have also experienced price drops. CoinGlass data reveals a 4% decline in Bitcoin Futures Open Interest (OI) and a 1.4% drop in Ethereum OI, indicating a bearish sentiment dominating the market.
Despite the recent downturn, some market participants remain hopeful that the anticipated approval of the Ethereum ETF could bolster market confidence and lead to a recovery. However, with Bitcoin’s price volatility and significant liquidations, the market remains on edge.