What’s Behind Today's Market Drop?

The crypto market dropped over 4.30% to $2.50 trillion due to a hawkish Fed official and Bitcoin ETF outflows.

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Joe G & Money Talks
June 18, 2024 • Estimated Reading Time: 6 minutes

What we will talk about today...

What’s Behind Today's Market Drop?

Bitcoin ETF Buying Frenzy: Who’s on the Selling Side? Insights from a Top Analyst

SEC's Crypto Enforcer Resigns: What This Means for the Future of Regulation

What’s Behind Today's Market Drop?

The crypto market dropped over 4.30% to $2.50 trillion due to a hawkish Fed official and Bitcoin ETF outflows.

TOTAL crypto market valuation daily performance chart.

  • Main Points:

    • Market Drop: Total crypto market cap fell by over 4.30%.

    • Fed's Impact: Neel Kashkari’s comments on rate cuts hurt sentiment.

    • Bitcoin ETF Outflows: Significant withdrawals from Bitcoin ETFs.

    • Long Liquidations: $403 million in long positions liquidated.

  • Detailed Insights:

    • Fed's Rate Cut Projections:

      Minneapolis Fed chief Neel Kashkari’s prediction of only one rate cut in 2024 contrasted with expectations, impacting the crypto market.

    • Bitcoin ETF Outflows:

      Bitcoin ETFs experienced continued withdrawals, reducing net reserves to $14.956 billion. A stronger U.S. dollar signaled a lower risk appetite.

    • Long Liquidations:

      $403 million worth of long positions were liquidated, adding selling pressure.

    • Technical Outlook:

      The market correction within a symmetrical triangle pattern could rebound to $2.48 trillion or drop to $2.09 trillion, depending on trendline support.

Spot Bitcoin ETF cumulative inflows.

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Bitcoin ETF Buying Frenzy: Who’s on the Selling Side? Insights from a Top Analyst

Despite Bitcoin ETFs buying, Bitcoin struggles. Analyst Willy Woo explains why.

  • Main Points:

    • Bitcoin's Bearish Momentum: Despite ETF buying, Bitcoin sees bearish trends.

    • Long-Term Holders Selling: LTHs are selling, impacting the market.

    • Paper Bitcoin Influence: The increase in paper BTC is slowing rallies.

  • Detailed Insights:

    • Long-Term Holders Selling:

      Analyst Willy Woo highlights that long-term holders (LTHs) are selling. The Coin Days Destroyed (CDD) metric shows a spike, indicating dormant coins are being sold. Similar sell-offs occurred during previous bull runs in 2017 and 2021.

    • Paper Bitcoin Impact:

      Paper Bitcoin, or derivatives not involving actual BTC ownership, is rising. Woo notes that in the past, BTC rallies were fueled by limited selling from original holders and miners. Now, paper BTC influences the market significantly.

    • Exchange Reserves:

      Bitcoin’s exchange reserves show no significant net deposits, indicating paper BTC's influence. During the 2022 bear market, paper BTC dictated the trends. Recent increases in paper BTC are slowing current market rallies.

₿itcoin reached $65,520. -1.01%

♢Ethereum reached $3,435.  -2.25%

SEC's Crypto Enforcer Resigns: What This Means for the Future of Regulation

David Hirsch, head of the SEC’s Crypto Asset and Cyber Unit, leaves after nine years, having led major enforcement actions against Binance, Coinbase, and other crypto firms.

David Hirsch on LinkedIn: This past Friday was my last day with the SEC after almost 9 years.… | 52 comments

This past Friday was my last day with the SEC after almost 9 years. During that time I had the opportunity to work on more complex, challenging investigations… | 52 comments on LinkedIn

www.linkedin.com/posts/david-hirsch-0299a64_this-past-friday-was-my-last-day-with-the-activity-7208377232317104128-WQST?utm_source=li_share&utm_content=feedcontent&utm_medium=g_dt_web&utm_campaign=copy

  • Main Points:

    • David Hirsch’s Departure: Leaves SEC after nearly nine years.

    • Enforcement Actions: Targeted unregistered securities, fraud, and manipulation.

    • Major Cases: Involved Binance, Coinbase, and Terraform Labs.

    • Future Plans: Plans to travel with family before son's college.

  • Detailed Insights:

    • Leadership Departure: David Hirsch announced his exit from the SEC, where he oversaw significant investigations and enforcement actions.

    • Major Enforcement Actions: Led the SEC’s crackdown on crypto violations, with notable cases against major firms like Binance and Coinbase.

    • Regulatory Impact: Under his guidance, the fiscal year 2023 saw impactful enforcement efforts in the crypto sector.

    • Personal Plans: Hirsch is excited about new challenges but will take a break to travel with his family.

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This article is not financial advice. Market conditions can change rapidly, and past performance does not guarantee future results