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The total cryptocurrency market capitalization plummeted 3.9% between June 20 and June 21, approaching its lowest level in five weeks at $2.34 trillion. This decline affected every top 10 coin, with Bitcoin (<a href="https://cointelegraph.com/bitcoin-price">BTC</a>) dropping 4.2%, Ether (<a href="https://cointelegraph.com/ethereum-price">ETH</a>) experiencing a 4% loss, and BNB (<a href="https://cointelegraph.com/binance-coin-price-index">BNB</a>) facing a 4.2% correction. Despite some recovery of intraday losses, the market remains in a bearish mood.
<figure data-ct-non-breakable="true">
 <img src="https://s3.cointelegraph.com/uploads/2024-06/5c9b584b-794d-4fdc-8851-e9fcc5031ff1.png" alt="" title="">
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 Total crypto market capitalization, 12-hour, USD. Source: TradingView
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<h2 data-ct-non-breakable="true" id="germany-sell-pressure-more-than-compensated-by-microstrategy-s-btc-purchase">Germany sell pressure more than compensated by MicroStrategy’s BTC purchase</h2>
Some analysts suggested that a large sale of Bitcoin by the German government caused the crypto market downturn. However, this explanation overlooks the fact that traditional finance investors reacted to unfavorable macroeconomic data. Traders are concerned that the stock market may have peaked and that the United States fiscal situation is weakening.
According to the onchain crypto analytics firm Arkham, a wallet linked to the German government <a href="https://cointelegraph.com/news/germany-btc-sell-arkham-wallet">transferred 6,500 BTC to exchanges</a> on June 19, worth $425 million at the time. Arkham claims that the wallet held nearly 50,000 BTC, believed to have been seized from the pirated movie website Movie2k, which operated in 2013. The evidence suggests that this entity sent BTC to Kraken, Bitstamp and Coinbase, leaving little doubt about its origin and effective sale.
However, this theory is flawed because the U.S.-based business intelligence firm <a href="https://cointelegraph.com/news/microstrategy-800-million-convertible-note-offering-bitcoin">M</a><a href="https://cointelegraph.com/news/microstrategy-800-million-convertible-note-offering-bitcoin">icroStrategy disclosed on June 20</a> that it had purchased an additional 11,931 BTC for $786 million. Thus, MicroStrategy’s buy covered the selling pressure, including the two-day $292 million net outflow from U.S. spot Bitcoin exchange-traded funds.
Given that no other regulatory changes or events could have negatively impacted the sentiment of cryptocurrency investors in the past couple of days, one should focus on the traditional finance industry, particularly on macroeconomic data. Despite the short-term correlation between the S&amp;P 500 index and the crypto sector, traders typically exit risk-on positions during periods of uncertainty.
<h2 id="u-s-futures-and-options-expiry-and-worsening-global-macroeconomic-conditions">U.S. futures and options expiry and worsening global macroeconomic conditions</h2>
According to Bloomberg, the U.S. stock market is <a href="https://www.bloomberg.com/news/articles/2024-06-21/global-bonds-jump-as-weak-european-data-amplifies-rate-cut-bets" target="_blank" rel="noopener nofollow">facing</a> a “triple witching,” an event that occurs every quarter when derivatives contracts tied to stock, index options, and futures are scheduled to mature. An aggregate of $5.5 trillion is set to expire on June 21, and as the S&amp;P 500 nears its all-time high, investors fear that weaker macroeconomic data indicate a higher recession risk.
Existing home sales in the U.S. fell for the third consecutive month in May, while the manufacturing and services purchasing managers’ index (PMI) readings for France and Germany came in below expectations. Similarly, in the United Kingdom, the PMI showed that private-sector companies reported slower growth than expected. Lastly, Japan’s inflation rose to 2.8% in May, higher than April’s figure of 2.5%.
Gennadiy Goldberg, head of U.S. rates strategy at TD Securities, <a href="https://finance.yahoo.com/news/debt-ceiling-standoff-could-trigger-112618425.html" target="_blank" rel="noopener nofollow">stated</a> that the U.S. debt ceiling, which has been suspended by Congress until the start of 2025, is expected to <a href="https://cointelegraph.com/learn/what-happens-when-a-country-defaults">create a standoff</a> and potentially trigger another sovereign credit rating downgrade, according to Reuters. “The 5-year credit default swaps (CDS) on U.S. sovereign debt indicate some worry,” Goldberg said.
Related: <a href="https://cointelegraph.com/news/why-is-bitcoin-price-down-today">Why is Bitcoin price down today?</a>
The worsening sentiment was reinforced after retail data provider Syntun <a href="https://www.cnbc.com/2024/06/20/chinas-618-e-commerce-festival-sees-a-decline-in-sales-for-the-first-time-in-8-years.html" target="_blank" rel="noopener nofollow">stated</a> that China’s annual mid-year e-commerce festival saw sales drop for the first time in eight years. The event celebrates the founding date of Chinese giant JD.com, which is the region’s second-largest in terms of annual sales, according to CNBC. Gross sales reached $102.3 billion in 2024, a 7% drop compared to 2023.&nbsp;
Under this scenario, the U.S. Dollar Index rose to its highest level in 50 days at 105.85, indicating that investors are moving away from the euro, British pound, Swiss franc and similar currencies. While the S&amp;P 500 index remained unchanged on June 21, traders viewed Bitcoin's 52% gains year-to-date in 2024 as a reason to take profits and reduce exposure amid macroeconomic uncertainty.
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.

Bitcoin price drop and crypto market turmoil intensifies — Is Germany to blame?

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