Bitcoin’s price has experienced a decline of 3.5%, dropping to $67,689 at the time of writing. This reinforces the resistance at the $69,000 level, indicating Bitcoin’s struggle to maintain its previous highs. Currently, BTC is trading 8% below its all-time high of $73,835. This recent price movement has triggered a widespread market correction.
Bitcoin’s drop below $68,000 during the Wall Street opening on May 31 has sparked a sell-off across the entire market. According to CoinGecko data, the global crypto market capitalization has decreased by 2.2% in the past 24 hours, reaching $2.5 trillion. This significant drop has raised concerns among both investors and traders.
In addition to Bitcoin, memecoins have also experienced a downturn. DOGE and SHIB, which have shown impressive performance recently, have not been spared. Shiba Inu’s SHIB has fallen by 7%, reflecting the broader market trend. In Solana’s ecosystem, new memecoins like Dogwifhat (WIF) and Book of Meme (BOME) have seen losses of over 5.8%.
The broader liquidation of long positions compared to short positions has further contributed to BTC’s underperformance. Within the last 24 hours, approximately $144 million worth of liquidations have occurred in the Bitcoin derivatives market, with $105.14 million of that being long positions. Liquidating long positions typically involves selling the asset, which can further push down the price.
Bitcoin’s open interest (OI) has reached around $33 billion, lower than its peak of about $39.3 billion in 2024. This flattening suggests a potential decrease in speculative trading or a decline in overall market confidence. The funding rate remains positive at 0.016% per week, indicating that longs are willing to pay shorts to maintain their positions. However, this rate has significantly dropped from its peak of over 2% per week in 2024, indicating shifting trader expectations regarding future price movements.
Data from Farside Investors shows that U.S. spot Bitcoin ETFs have received $1.96 billion in net inflows since May 15. This amount is equivalent to 64 days of BTC issuance from miners. The U.S. spot Bitcoin ETF market now manages over $50 billion in assets.
In comparison, U.S. gold ETFs hold approximately $118.5 billion, according to the World Gold Council. These inflows typically result in the withdrawal of Bitcoins from exchanges, which has now reached its lowest level since March 2018, with 2.3 million BTC, according to Glassnode data.
While it is uncertain if these coins will be sold in the near future, their transfer to cold storage and custodians outside of exchanges often reduces market liquidity. This issue becomes more prominent in bull markets, where thinner order books at higher price levels can amplify price movements due to aggressive buying.
