On June 24, the crypto market fell sharply again, with BTC falling below $63,000 and SOL falling to around $125. Although major currencies have not yet fallen back to the levels of April this year, the decline of many blue-chip altcoins has approached the points at the beginning of last year's bull market. Many investors lamented that half a year's gains were wiped out in a few weeks.
The number of spot currencies that fell on the Binance platform alone was 1,150, while the number that rose was only 106, accounting for less than 10%.
The crypto market is experiencing a normal ups and downs, but in the past, when BTC rose, the altcoins would make money. But now, when BTC falls a little, the altcoins will be beaten. Recently, the altcoins have been falling continuously, and there are many negative factors behind it.
1. Bitcoin spot ETF has a large outflow and a decrease in inflow
On June 23, according to HODL15Capital monitoring, the US Bitcoin spot ETF sold 7,690 BTC in the past week (Week 24).
On June 21, the U.S. Bitcoin spot ETF saw outflows for five consecutive days, with the total outflow exceeding $900 million in the past week. Grayscale GBTC and Fidelity FBTC were the largest buyers, with only BlackRock IBIT buying.
As shown in the above figure, Bitcoin inflows were significant in January, February, and March, corresponding to the encouraging rise in the crypto market. However, in April, there was no negative inflow, and the cryptocurrency market fell sharply during the same period. Although there was an inflow in May and June, the flow rate dropped sharply and the inflow trend slowed down significantly.
Similarly, the 10x Research report noted that the Bitcoin spot ETF saw a large outflow (average outflow of $660 million in 5 days) as the overall net outflow across various sectors (stablecoins, futures leverage, ETFs, etc.) was $2.4 billion, the third week of declining net flows since the ETF was launched in January 2024.
2. Large-scale token unlocking and selling pressure
According to Token Unlocks data, starting from June 24, the mainstream crypto projects on the entire network will unlock a total of $188 million worth of tokens in the next 7 days. Previously, $363.79 million worth of tokens were unlocked between June 10 and 16, and a week after May 26, OP, DYDX, SUI and other tokens also ushered in a one-time large-scale unlocking, totaling about $380 million. 10x Research stated in its market analysis report that the reason for the sharp drop in the price of altcoins is that the market has difficulty digesting these huge token unlockings, totaling $483 million, including Aptos ($97 million), IMX ($51 million), STRK ($75 million), etc. Early investors and venture capital institutions seem to be under pressure to cash out, leading to an overall decline in the market and dragging down the price of Bitcoin.
In addition, Bitcoin miners have begun selling their Bitcoin inventory. Since June, Bitcoin miners have sold more than 30,000 BTC (about $2 billion), the fastest sales pace in more than a year, mainly due to the tightening of miners' profit margins caused by the halving.
3. Investors actively sell off and FUD sentiment spreads
On June 23, Bank of America reported that investors withdrew $300 million from the gold market, $400 million from the cryptocurrency market, and $15.8 billion from cash last week. On June 19, the German government wallet sold about 6,500 BTC. The crypto wallet has held nearly 50,000 BTC since February 2024. These funds were seized from the pirated movie website operator Movie2k and currently still hold 43,359 BTC, worth $2.83 billion.
At the same time, Santiment data showed that the "persistent FUD" widely spread on social media platform X during Bitcoin's sideways trading at the $65,000 mark was mainly due to traders' constant bearishness. In addition, its weighted sentiment index (an indicator that measures the volume of Bitcoin mentions on X and compares the proportion of positive and negative comments) has been negative since May 23.
4. Macro level: unclear supervision and policy pressure
On June 21, the U.S. Securities and Exchange Commission (SEC) judge hinted at rejecting the motion to dismiss in the Kraken case, pointing out that crypto assets may be sold as securities on its platform. On the same day, a California judge ruled that the case of Ripple CEO suspected of securities fraud will continue to be heard and dismissed four other class action claims.
On June 20, the U.S. Commodity Futures Trading Commission (CFTC) began investigating the cryptocurrency business of Chicago-based trading company Jump Crypto, including its trading and investment activities. In addition, the crypto market is also facing the impact of the potential U.S. presidential election. Although there have been reports that Biden may "soften" his attitude towards cryptocurrencies, his rival Trump has clearly expressed his support for cryptocurrencies, so it is not ruled out that Biden will increase the possibility of suppressing the crypto market during the campaign.
5. Binance’s new coins performed poorly
Recently, the community has questioned Binance’s listing of coins and the poor performance of new coins after launch. It also questioned that the prices of VC coins are inflated and there is an obvious bubble, which will have a negative impact on the long-term development of the entire industry.
