Bitcoin Price Dips Below $65K Amid Market Downtrend and Institutional Sell-Offs

• Bitcoin recently dropped below $65,000, marking its lowest price in a month.
• The newly introduced zkSync token experienced the most significant decline among the top 100 cryptocurrencies by market capitalization.
• Overall market capitalization decreased from $2.55 trillion to $2.48 trillion, driven by notable declines in major cryptocurrencies like Bitcoin, Ethereum, BNB, and Solana.

Explore the latest shifts in the crypto market as Bitcoin hits a monthly low and zkSync suffers substantial losses. Discover the underlying factors influencing these trends and what the future might hold for investors.

Bitcoin Falls to Monthly Low

Bitcoin, the leading cryptocurrency, saw its value plummet to $64,548 within the past 24 hours, signaling a notable decline from its previous low of $65,240 recorded last week. This downward trend was exacerbated by the liquidation of long positions worth over $150 million. However, by Tuesday morning, Bitcoin’s price showed some signs of stabilization around the $65,600 mark.

Impact on Major Cryptocurrencies

Not just Bitcoin, but other significant players in the cryptocurrency market like Ethereum, BNB, and Solana also faced downticks of 3%, 1.5%, and 5%, respectively. These declines contributed to an overall reduction in the total cryptocurrency market capitalization from $2.55 trillion to $2.48 trillion, a drop of approximately 2.5%, according to CoinGecko. Yet, amidst this downturn, XRP and Ondo managed to buck the trend, increasing by 2.5% and 2.2%, respectively.

zkSync Token Underperforms

Among the top 100 cryptocurrencies, the newly launched zkSync token (ZK) emerged as the worst performer, experiencing a massive 26% drop over the past 24 hours. This dramatic decline highlights the volatility and risk associated with newer digital assets entering the market.

Institutional Investors’ Sentiment

The overall sentiment among institutional investors has been notably bearish. Last week, institutional investors were net sellers, resulting in net outflows of $621 million from Bitcoin ETFs. This trend persisted as net outflows from U.S. spot Bitcoin ETFs reached $145.9 million, according to Farside Investors. A key factor behind this lack of confidence is the Federal Reserve’s increasingly hawkish stance on monetary policy. Initially, three rate cuts were anticipated for the year, but the recent FOMC meeting suggested only one rate cut might occur. Minneapolis Federal Reserve President Neel Kashkari’s comments on delaying rate cuts until December further dampened market optimism.

Liquidations and Market Optimism

Over the past 24 hours, crypto liquidations totaled $500 million, with the majority—$432 million—stemming from long positions. Wintermute’s trading desk shared a note with CoinOtag, indicating that the bearish sentiment might be short-lived. The note highlighted that central banks like the Bank of Canada and the European Central Bank have already initiated rate cuts, suggesting a possible global shift towards monetary easing.

Ongoing Pressure from Bitcoin Miners

Despite the market’s current state, Bitcoin miners continue to sell their holdings to fund operations and upgrade hardware. Following a brief increase in profitability during the recent Bitcoin halving event and the launch of Runes, the interest has since waned. Furthermore, potential repayment of Mt. Gox creditors could introduce an additional 137,980 BTC—valued at around $9.04 billion currently—into the market, potentially causing a sudden spike in sell pressure.

Conclusion

The recent downturn in the cryptocurrency market underscores the volatility inherent in digital assets. Major factors such as institutional investor sentiment, Federal Reserve policy decisions, and continued selling by Bitcoin miners are pivotal in shaping market trends. While bearish sentiments prevail, potential global monetary easing offers a glimmer of hope for recovery. Investors should remain vigilant and stay informed about these dynamic market developments.