Bitcoin extends drop after one of crypto's worst weeks of 2024: Report

By Sidhartha Shukla

Losses are piling up in the crypto market after its second-worst weekly decline of 2024, a reflection of cooling demand for Bitcoin exchange-traded funds and uncertainty over monetary policy.
 

A gauge of the largest 100 digital assets fell about 5% in the seven days through Sunday, the steepest such slide since April, data compiled by Bloomberg show. Bitcoin shed 4% to trade at $61,153 as of 11:44 a.m. Monday in London, a more than one-month low. The leading token by market value has been buffeted by a six-day streak of outflows from dedicated US ETFs. 

Adding to fears of increased selling pressure, the rehabilitation trustee of Mt. Gox — the Japanese crypto exchange that was hacked more than a decade ago — announced that it would start repayments of Bitcoin and Bitcoin Cash in July. 

 

“Given the Mt Gox announcement, it seems there are market participants positioning themselves short,” Stefan von Haenisch, head of trading at OSL SG Pte. “Crypto markets struggling to catch a bid at the moment.”

 

The cracks in crypto come amid doubts about the Federal Reserve’s scope to cut interest rates quickly from a two-decade high. For some analysts, the retreat in digital assets is a warning sign for broader risk appetite.

The current crypto market dynamic is “characterized by low volatility, soft volumes, and orderbooks getting unbalanced when prices start to move to the edges of their range,” David Lawant, research head at FalconX, wrote in a note.

The drops in some corners are particularly notable: the run of weekly declines for Ether and Solana are the longest since last year and 2022 respectively.

That’s even as fund companies prepare to launch the first US ETFs investing directly in Ether, the second-ranked cryptoasset. Solana, meanwhile, was very recently a favorite for a variety of digital-asset hedge funds.

Bitcoin hit a record of $73,798 in March but is trailing traditional investments such stocks, bonds and gold this quarter. The 200-day moving average at about $57,500 is in focus now as a possible zone of support for the price, according to IG Australia Pty Market Analyst Tony Sycamore.

“A bearish mood seems to be setting in,” said Caroline Mauron, co-founder of digital-asset derivatives liquidity provider Orbit Markets. “The market is finding it hard to digest any large sell orders.”