Crypto has another episode this morning. Why is crypto down again even though it seems to be stabilizing and rising for weeks? BTC USD fell below $63,000 and ETH USD was smashed in a tougher bloodbath.
If we take a closer look at the onchain data, the main culprit was the same old-fashioned leveraged flush. Long positions that had been sitting comfortably were liquidated in waves, with $580 million liquidated from long positions alone in 24 hours. The dominoes began to fall and, as usual, overleveraged traders were wiped out.
Another reason probably comes from Japan. The Nikkei just printed a new all-time high yesterday, only to reverse and regain ground today. Whenever this happens, risk appetite across Asia tends to evaporate. Retail traders in Korea, Japan and Southeast Asia began selling on the exchanges, and Binance once again saw the biggest inflows of the session, most of which quickly turned into sell orders.
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Why Is Crypto Down? The usual suspects showed up on time, wiping out BTC USD while battling ETH
Part of the pressure still comes from the spot outflow of Bitcoin ETFs. The heavy bleeding may have slowed a bit, but money continued to leave products and eliminated the layer of consistent purchases that had kept things going before. Without this bid, it will be much easier to push the price.
Then the usual geopolitical machinations began. This time, US Vice President Vance announced progress in returning nuclear inspectors to Iran. Iranian officials quickly shut it down. While this didn’t crash the market per se, it gave market makers a trigger to play the news.
As expected, BTC USD broke first, falling below $63k, destroying all its supports. A combination of steady ETF outflows and a reduction in leveraged longs has made it difficult for the price to find any real footing.
This is interesting because the timing was too opportune as Asian markets abdicated risk and started dumping. BTC USD is of course feeling it first because a lot of the aggressive volume is still going through the platforms that serve this region. ETH USD didn’t struggle much either. Now it looked even weaker.
ETH has been showing relative strength against the US Dollar in recent weeks, but unfortunately, today it turned lower with little resistance. Following BTC, ETH USD broke off faster, but it looks like it has printed a triple bottom, which is not bad from a chart perspective. This could be a make or break point for Ethereum, although it appears to be breaking as of this writing.
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why? What now?
Binance again saw the most activity with inflows during the Asian session, translating into selling pressure. This pattern has become quite consistent on days like this. Nikkei, reverse gear after hitting all-time highs yesterday, it added to the negative sentiment, but it’s not all doom and gloom.
In late July and early August 2024, the Nikkei 225 fell sharply from its record highs. The trigger was largely the rate hike by the Bank of Japan, which led to a strengthening of the Japanese yen and forced traders to stop the famous “yen trade”. Interestingly, the Nikkei recovered much faster than many expected. The panic subsided, the yen stabilized, and over the following weeks both stocks and crypto rallied again.
Today, the move was much smaller and more discreet. Most of the damage is still coming from within crypto, especially with over-leveraged and constant ETF outflows. Also, the market has been through much uglier resets than this one.
Stay tuned here.
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Post Crypto News, June 23: Why Is Crypto Falling? BTC USD price falls below 63k as ETH hits triple bottom on massive deleveraging first appeared on Cryptonews.