Hassan Maishera
TL;DR
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Bitcoin is trading above the $56k level after dropping below $49k on Monday.
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The volatile price action comes amidst spot Bitcoin ETF outflow in the United States.
BTC Slips to $49k Before Rebounding Above $56k
Bitcoin, the leading cryptocurrency by market cap, experienced a volatile price action over the last 24 hours. After its massive selloff over the weekend, BTC’s selloff continued on Monday as it dropped to the $49k region.
The selloff resulted in over $1.2 billion being wiped out from the cryptocurrency market. However, Bitcoin has added more than 6% to its value since then and is now trading above $56k per coin.
The volatile price action comes amidst a massive selloff in the US stock market and net outflow for US spot Bitcoin ETFs. Data obtained from SoSoValue revealed that spot bitcoin exchange-traded funds in the U.S. experienced $168.4 million in net outflows on Monday
Grayscale’s GBTC recorded $69.12 million daily net outflows, with Ark Invest and 21Shares’ ARKB also recording $69 million outflows, while Fidelity’s bitcoin fund reported a $58 million net outflow.
Altcoins are also recovering after the recent bearish run. Solana leads the recovery after adding 16% to its value and is now trading at $141 per coin. BNB is also up 12% and is currently trading at $491.
While speaking to Cryptowisser on the recent price action, Ruslan Lienkha, chief of markets, YouHodler, said,
“Macroeconomic factors drive Bitcoin's recent sell-off. These include the latest jobs data in the US, fears that the Federal Reserve may struggle to achieve a soft landing, geopolitical tensions, and the deflating AI bubble—all of which negatively impact global stock indices and signal a risk-off for investors.
In the crypto market, the situation was exacerbated by weekend trading, a period of low liquidity when institutions are typically inactive, and fiat fund transfers face difficulties. Consequently, the market experienced a wave of margin calls on long positions. Following such a significant drop, we might see a corrective rebound in Bitcoin's price. However, this increase will likely be limited due to the prevailing pessimism in the broader markets.”
