Bitcoin Leads Latest Crypto Market Selloff Amid Key ETF Outflows and Liquidations

• The crypto market experienced a significant downturn today, attracting widespread attention.
• A plethora of major cryptocurrencies, including Bitcoin, Ethereum, DOGE, and SHIB, have endured notable losses.
• The market saw over $123 million in liquidations within the last 24 hours, underpinning the extent of this downturn.

The crypto market faces a sharp decline today with major cryptocurrencies like Bitcoin and Ethereum taking a hit. Dive into the key reasons behind this selloff and how it impacts the market.

Key Drivers Behind the Crypto Market Selloff

Several factors contribute to the abrupt downturn in the crypto market, with multiple key drivers influencing investor sentiment and market dynamics.

Concerns Over Bitcoin ETF Outflows

After five consecutive days of positive inflows till July 1, the U.S. Spot Bitcoin ETF saw significant outflows. July 2 marked an outflux of $13.7 million, overshadowing inflows from major entities like BlackRock’s IBIT and Fidelity’s FBTC totaling $19.5 million. However, GrayScale’s substantial outflow of $32.4 million neutralized any gains, causing investor apprehension. These fluctuations suggest that investors are wary and possibly looking for more stability before reentering the market.

Impending Options Expiry

The expiration of significant BTC and ETH options is another critical factor causing uncertainty in the market. According to Deribit, BTC options worth over $1.04 billion with a put/call ratio of 0.80 are set to expire soon, with a maximum pain price of $63,000. Concurrently, ETH options valued at $479.30 million, with a put/call ratio of 0.38 and a maximum pain price of $3,450, are also nearing expiry. These impending expiries force traders to adjust their positions, contributing to increased market volatility and decreased risk appetite.

Potential Delay in Ethereum ETF Launch

Market participants were eagerly awaiting the SEC’s approval of a Spot Ethereum ETF. However, delays have stirred apprehension among investors. Nate Geraci, president of ETF Store, hinted at a possible mid-July launch for the Ethereum ETF. Bloomberg reports also align with this timeline, suggesting that the ETF might go live around July 15. Uncertainty around this approval process is causing additional strain on market sentiment.

Crypto Market Liquidation Exceeds $120 Million

Within the last 24 hours, the crypto market experienced liquidations totaling $123.62 million, according to CoinGlass data. Bitcoin and Ethereum bore the brunt of this with liquidations of $34.74 million and $32.87 million, respectively. Despite the downturn, some analysts remain optimistic about future market performance. They speculate that factors such as the anticipated Ethereum ETF approval might lead to a market rebound.

Bitcoin briefly touched the $61,000 mark, indicating inherent risks in the market. Prominent crypto analyst Ali Martinez warned of potential liquidations exceeding $1 billion if Bitcoin hits the $62,600 threshold. As of now, Ethereum prices have dropped around 3%, Dogecoin fell 1.3%, BNB slipped 2.5% to $566.23, and Shiba Inu experienced a 1.34% decrease to $0.00001695. The decline in Open Interest (OI) for Bitcoin and Ethereum Futures, falling by 4% and 1.4% respectively, further reflects the bearish market sentiment.

Conclusion

The recent turbulence in the crypto market stems from a complex mix of ETF outflows, options expiries, and delayed ETF launches. Despite current setbacks, future developments like the Ethereum ETF approval could potentially rejuvenate the market. Investors should remain cautious yet optimistic, as the sector is poised for significant long-term growth amid short-term volatility.