Long

Bitcoin ETF

when

The cryptocurrency market took a hit today, with the total market capitalization dropping by over 4.30% to about $2.50 trillion on June 18. This plunge has left many investors scratching their heads, trying to understand the core catalysts behind this downturn and whether a recovery is on the horizon.
<figure>
 <img src="https://s3.cointelegraph.com/uploads/2024-06/cfbe5749-9032-4d1d-b1ad-05f35deeba19.png">
 <figcaption style="text-align: center;">
 TOTAL crypto market capitalization&nbsp;daily performance chart. Source:<a href="https://www.tradingview.com/x/HG0S3g9R/" target="_blank" rel="noopener nofollow"> TradingView</a>
 </figcaption>
</figure>
<h2 id="fed-official-s-rate-cut-projection-hurt-crypto-market">Fed official's rate cut projection hurt crypto market</h2>
Today's crypto market decline is part of a correction that started over the weekend when Minneapolis Federal Reserve chief Neel Kashkari made a "reasonable prediction" about only one rate cut in 2024.&nbsp;
<figure>
 <img src="https://s3.cointelegraph.com/uploads/2024-06/42661382-abc4-4b66-b355-20521a89c12f.png">
 <figcaption style="text-align: center;">
 TOTAL crypto market capitalization daily performance chart. Source: TradingView
 </figcaption>
</figure>
“We need to see more evidence to convince us that inflation is well on our way back down to 2%,” Kashkari <a href="https://www.youtube.com/watch?v=i33s4tV9qXg" target="_blank" rel="noopener nofollow">said</a> during a June 16 telecast on CBS’s Face the Nation, adding:&nbsp;
<blockquote>
 “We’re in a very good position right now to take our time, get more inflation data, get more data on the economy, on the labor market, before we make any decisions.”
</blockquote>
His comments contrasted <a href="https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html" target="_blank" rel="noopener nofollow">bond traders' expectations</a> of at least two interest rate cuts in 2024 in September and November. For instance, the target rate probabilities for the September rate cut have fallen to 55% on June 18 from 66% over the weekend.
The lowering of rate cut expectations coincides with a relief rebound in U.S. Treasury yields, with the annual returns on the benchmark 10-year bond (US10Y) rising 14 basis points since the weekly session opened on June 17.
<figure>
 <img src="https://s3.cointelegraph.com/uploads/2024-06/9f705a35-26ed-414a-88f0-def248818721.png">
 <figcaption style="text-align: center;">
 US10Y daily performance chart. Source: TradingView
 </figcaption>
</figure>
Higher bond yields reduce the opportunity cost of holding riskier assets like cryptocurrencies, a reason why the crypto market has gone down considerably this week, including the losses today.
<h2 id="bitcoin-etf-outflows-continue">Bitcoin ETF outflows continue</h2>
Today's crypto market decline further takes cues from a de-risking strategy undertaken by the Bitcoin exchange-traded fund (ETF) traders and investors.&nbsp;
Related:&nbsp;<a href="https://cointelegraph.com/news/digital-asset-funds-biggest-outflow-since-march">Digital asset funds see biggest weekly outflow since March</a>
Notably, the U.S.-based spot Bitcoin ETFs witnessed a 3.65% drop to around $15.10 billion in its holdings in the week ending June 14. The outflows trend continued this week, with the investment vehicles witnessing $145.90 million worth of withdrawals on June 17, bringing the net ETF reserves to $14.956 billion.&nbsp;
<figure>
 <img src="https://s3.cointelegraph.com/uploads/2024-06/25800eb0-4952-472f-9b7b-add1f3edfa98.png">
 <figcaption style="text-align: center;">
 Spot Bitcoin ETF cumulative inflows. Source: <a href="https://farside.co.uk/?p=997" target="_blank" rel="noopener nofollow">Farside Investors</a>
 </figcaption>
</figure>
These outflows coincide with a rise in the U.S. dollar's strength versus a basket of top foreign currencies, as tracked by the U.S. dollar index (DXY) metric below.
<figure>
 <img src="https://s3.cointelegraph.com/uploads/2024-06/c3cc5b50-72a9-4cbf-b7d4-e2304b2a8206.png">
 <figcaption style="text-align: center;">
 DXY daily performance chart. Source: TradingView
 </figcaption>
</figure>
A stronger dollar often signals a lower risk appetite among investors, which helps explain the accelerating outflows from Bitcoin ETFs and the resulting anxiety in the crypto market.
<h2 id="long-liquidations-hurt-crypto-market-bulls">Long liquidations hurt crypto market bulls</h2>
The crypto market declines have accelerated further due to long liquidations overpowering the short ones in the last 24 hours.
<a href="https://www.coinglass.com/LiquidationData" target="_blank" rel="noopener nofollow">Data from Coinglass</a> shows that long traders—those betting on the crypto market upside—have witnessed circa $403 million worth of liquidations in the last 24 hours. In comparison, short traders suffered over $61 million in liquidations in the same period.
<figure>
 <img src="https://s3.cointelegraph.com/uploads/2024-06/8b70e23c-2b1d-484f-a1b9-9b2764385b7b.png">
 <figcaption style="text-align: center;">
 Crypto market liquidation heatmap. Source: Coinglass
 </figcaption>
</figure>
When long positions are liquidated, traders who are betting on prices going up are forced to sell their positions, often at a loss. This increased selling pressure has driven the crypto market valuation lower today.
<h2 id="will-the-trendline-support-level-hold">Will the trendline support level hold?&nbsp;</h2>
From a technical standpoint, today's crypto market declines are part of a correction inside its prevailing symmetrical triangle pattern. For instance, the market capitalization has dropped 12.34% after testing the triangle's upper trendline as support, as shown below.
<figure>
 <img src="https://s3.cointelegraph.com/uploads/2024-06/d1225fb6-1866-4bc7-9788-135ef52cc8a6.png">
 <figcaption style="text-align: center;">
 TOTAL crypto market valuation daily performance chart. Source: TradingView
 </figcaption>
</figure>
Looking forward, the crypto market valuation may rebound toward the upper trendline after testing the lower trendline as support. This could ideally take the market cap toward $2.48 trillion by June, up 9.5% from the current levels&nbsp;
Conversely, a breakdown below the lower trendline will likely crash the crypto market cap toward its 200-day exponential moving average (200-day EMA; the blue wave) at around $2.09 trillion.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Why is the crypto market down today?

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