Cryptocurrencies are experiencing another downward session today, following yesterday’s broad market sell-off. The crypto reserve announced by Donald Trump, which includes Bitcoin, Ethereum, Cardano, Ripple, and Solana, failed to sustainably reverse market sentiment. Bitcoin is down over 3.5%, while Cardano and Ripple have dropped by 5% and 8%, respectively. Ethereum is also losing nearly 3%.
- Low ETF demand and capitulation among short-term Bitcoin holders—who are now averaging an 8% loss—continue to weigh on the market. More importantly, the current market environment is unfavorable for a sustained crypto rally. Wall Street indices have had a tough few days, with yesterday’s S&P 500 session marking the weakest of the year.
- Markets are growing increasingly concerned about how Bitcoin would respond to a potential U.S. economic slowdown, particularly given rising inflation expectations. The broader sell-off in “Trump Trade” assets and the tech sector has also put riskier assets like Bitcoin and altcoins under renewed pressure.
- Investors are now seriously assessing weaker recent U.S. economic data, including yesterday’s ISM Manufacturing report, which showed a sharp increase in the price component alongside a decline in orders and employment. If the “risk-off” sentiment continues this week, we could see Bitcoin testing recent lows around $78,000, with a potential drop toward the $72,500 - $73,000 range, where Glassnode data suggests stronger volume accumulation.
Bitcoin (D1 Interval)
Bitcoin slid again below key support at EMA200 level (the red line), signalling potentially further pressure on crypto market.
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Source: xStation5
Recent sessions have seen significant BTC outflows from ETFs, particularly BlackRock’s IBIT. Lower capital inflows into crypto ETFs place the market in a difficult position, especially considering that the crypto bull run has now lasted for over 12 months—with one of its primary catalysts being the launch of Bitcoin ETFs in the U.S.
Source: XTB Research, Bloomberg Finance L.P.
However, despite Bitcoin’s 30% decline from its December highs, the total BTC holdings in ETFs have not seen a dramatic reduction, suggesting that the overall reserves remain relatively stable despite the recent sell-off.
Source: XTB Research, Bloomberg Finance L.P.
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