Bitcoin (BTC) experienced a significant drop below $64,000 on June 21, marking the first time in over a month that it reached this low. The cryptocurrency opened at $64,840 but fell to an intra-day low of $63,451. The previous time BTC traded below $64,000 was on May 15, when it rose from a low of $61,299 to a high of $71,980 on May 21, driven by excitement surrounding the potential approval of a spot Ether (ETH) exchange-traded fund (ETF).
Currently, Bitcoin is trading at $63,552, representing a 3.54% decrease in the last 24 hours. The broader crypto market capitalization has also dropped by 3.24% to reach $2.33 trillion, while Ether (ETH) has decreased by 2.25% to $3,475.
There are several reasons why Bitcoin is leading the market in this correction. One factor is the withdrawal of capital from spot Bitcoin ETFs, indicating investors’ risk-off sentiment. Spot Bitcoin ETFs in the U.S. have experienced outflows for the fifth consecutive day, with total withdrawals amounting to $900 million for the week. This is the highest outflow activity since late April. Grayscale’s GBTC led with $53.1 million in outflows, followed by Fidelity’s FBTC at $51.1 million. VanEck’s ETF reported $4 million in net outflows, while Invesco and Galaxy Digital saw $2 million in net outflows. BlackRock’s IBIT was the only product with net inflows totaling $1.5 million, while other funds recorded zero flows.
Additionally, declining network activity may be contributing to the downward trend in Bitcoin’s price. Daily active addresses on the Bitcoin network have decreased by 35% over the last 90 days, from 971,789 addresses on April 4 to 632,620 on June 20. This suggests a reduced demand for BTC within the ecosystem, which impacts its price.
From a technical perspective, Bitcoin’s price decline is part of a broader correction that began after it was rejected from the $72,000 resistance level on June 7. It has lost key support levels, including the 50- and 10-day exponential moving averages (EMAs) at $66,724 and $66,594, respectively. The 200-day EMA at $64,294 served as the last line of defense for Bitcoin. Currently, BTC’s price is breaking below the support provided by the 200-day EMA, accompanied by a 15% increase in daily trading volumes, indicating the continuation of the sell-off.
In conclusion, Bitcoin’s recent drop below $64,000 can be attributed to factors such as the withdrawal of capital from spot Bitcoin ETFs, declining network activity, and the loss of key support levels. As always, readers should conduct their own research and exercise caution when making investment decisions.