- Bitcoin fell below $60,000 as ETF outflows and option expirations led to market-wide liquidations
- Analyst Ali Martinez warned of a possible $1 billion liquidation if Bitcoin rebounds to $62,600
Bitcoin (BTC) drops again, with the crypto falling below $60,000 on the price charts. This represented a drop of 4% in just 24 hours. In fact, this period of depreciation marked BTC as the most affected cryptocurrency amid a broader market downturn.
Source: BTC/USD, TradingView
This drop coincided with the withdrawal of more than 4% of the crypto market in the past 24 hours, impacting major assets such as Bitcoin, Ethereum, DOGE, BNB and LINK.
However, it is worth noting that the Fear & Greed Index was trading at just 48 at the time of writing, indicating neutral sentiment among market participants. In short: investors are neither overly fearful nor overly greedy at the moment, but uncertainty remains prevalent.
This is especially true in light of the fact that Mount Gox is expected to begin repaying its creditors this month. BTC worth more than $9 billion is owed to more than 127,000 creditors, many of whom will try to cash in on their unrealized gains – an invitation for selling pressure.
Bitcoin ETF Outflows and Investor Concerns
The outflows from US Spot Bitcoin ETFs have contributed significantly to the ongoing market situation. After five consecutive days of inflows of $129.5 million through July 1, the trend reversed itself with outflows of $13.7 million on July 2.
$14.1 million and $5.4 million inflows were recorded from BlackRock IBIT and Fidelity’s FBTC, respectively. However, a significant $32.4 million outflow from GrayScale dampened these gains. This shift in ETF movements has therefore raised concerns among investors about the price development of Bitcoin.
At the same time, the impending expiration of substantial BTC and ETH options has also contributed to market volatility. In fact, Deribit data shows that BTC options worth over $1.04 billion, with a put/call ratio of 0.80, are set to expire on Friday, July 5.
Source: Deribit
The maximum pain price for these options is $63,000, which marks a critical threshold that can influence investor behavior and market dynamics. Consequently, anticipation of this expiration date has led to cautious trading and increased uncertainty among market participants.
Liquidations reinforce the market sell-off
According to MintGlassThe recent sell-off caused more than $260 million in liquidations in just 24 hours. More than 100,000 traders were liquidated during this period, with the largest liquidation involving an ETH-USDT SWAP on OKX.
Bitcoin faced liquidations totaling $67 million, while Ethereum faced $63 million in liquidations.
However, despite the current downturn, some analysts remain optimistic about the future of the market. They anticipate potential profits associated with upcoming regulatory decisions.
That said, analyst Ali Martinez has warned in return for the possibility of further liquidations. According to him, if Bitcoin recovers and reaches $62,600 again, the market could see more than $1 billion in liquidations.
Launch of Ethereum ETF Delayed
finally, the delay in launch of Spot Ethereum ETFs has further contributed to the current pessimism in the market. The SEC has set a new deadline of July 8 for filing forms, delaying the expected approval process.
The community has yet to receive this well, with ETF Store president Nate Geraci among those expressing frustration with the lengthy process. Many are now hoping that BTC and the rest of the crypto market will continue their bull run once these ETFs go live.