Bitcoin declined to $61,336.93 at press time, down more than 2% in the last day and approaching the $60,000 threshold. The cryptocurrency dropped more than 24% in the last month, falling from $82,000 in mid-May to current levels. Institutional selling and ETF withdrawals in the US were the primary causes of the recent decline, according to algorithmic trading firm Wintermute, which stated there are no obvious indications that capital is returning and the market bottom has not yet been verified. The crypto community remains divided on whether Bitcoin has reached a bottom, with on-chain metrics showing over 50% of circulating supply held at a loss — a level last seen in November 2022 after FTX's collapse when Bitcoin traded below $20,000.
Analysts Disagree on Bitcoin Market Bottom
One analyst highlighted that the RSI for the Bitcoin market cap has fallen below its 2018 bottom. However, another analyst observed the exact opposite trend in market indicators. Wintermute claimed there are no obvious indications that capital is returning and raised the flag that the market bottom has not yet been verified. The firm identified institutional selling and ETF withdrawals in the US as the primary causes of the recent decline in Bitcoin.
Bitcoin Supply in Loss Exceeds 50% for First Time Since FTX Collapse
CryptoQuant's Bitcoin Supply in Loss metric, 7-day moving average, has risen above 50%. This indicates that, according to the price at which those coins last moved, over half of the circulating supply of BTC is currently being held at a loss. Such levels have historically corresponded with times of extreme market pessimism and surrender. This indicator last crossed the 50% mark in November 2022, when Bitcoin was trading below $20,000 after FTX's collapse. The profit and loss chart by Glassnode indicated that at the cycle peak, almost half of the total supply was profitable. As more than 8 million Bitcoins are submerged currently, that number has dropped precipitously, underscoring the magnitude of the most recent market reset.
Institutional Selling Drives ETF Outflows as Risk Index Reaches Maximum
Swissblock's Risk Index and Bitcoin ETF flow data indicate that market conditions have changed toward a higher-risk environment. As the Risk Index rises to 100, the chart's highest level, Bitcoin falls to about $61,000, indicating strong selling pressure. There have been notable net outflows from U.S. spot Bitcoin ETFs, suggesting that institutional investors are lowering their exposure rather than increasing it. Swissblock noted that selling pressure is being absorbed again, and as long as Risk stays in Capitulation Risk, Bitcoin remains under structural pressure.
FAQ
What price level did Bitcoin reach at press time?
Bitcoin declined to $61,336.93 at press time, down more than 2% in the last day.
When did the Bitcoin Supply in Loss metric last cross 50%?
This indicator last crossed the 50% mark in November 2022, when Bitcoin was trading below $20,000 after FTX's collapse.
What did Wintermute identify as the primary causes of Bitcoin's recent decline?
Wintermute identified institutional selling and ETF withdrawals in the US as the primary causes of the recent decline in Bitcoin.
