3 Key Issues Behind The Crypto Market Slumps and 3 Positive Signs to Watch

With seven days left to conclude this year’s second quarter (Q2), the general market outlook has remained bearish, with little or no hope of a positive turnaround. Consequently, market participants seem to shift attention to Q3 and possible events that can swing the market in a bullish trajectory.

At the time of writing, Coincodex statistics revealed the entire market is down by about 3.39% in the past 24 hours, with a market capitalization of approximately $2.29 trillion. The pioneer crypto asset, Bitcoin (BTC), is also down by 2.92% from the previous day, trading around the $62,500 price region.

Despite its declines, BTC’s dominance recorded a 0.2% upswing in the past 24 hours, raising its contribution to the global crypto market cap to about 53.87% and underscoring the massive declines hitting across all other cryptocurrencies.

Amid the debilitating market outlook, we have identified three significant drivers fuelling the poor market run, and we shall subsequently highlight them in this insight.

Increasing Liquidity Concerns

Since the market started becoming less profitable, the amount of traders’ liquidity has surged at an alarming rate, emerging as one of the most significant fuelers of the declining prices recorded across several crypto assets, as money must first flow into these digital assets to catalyze their price ascent.

Unfortunately, the opposite has played out in recent times, which, if sustained, would plummet the market further, culminating in more declines for traders still holding on to their crypto assets.

According to the crypto market total liquidations statistics on Coinglass, a crypto trading and information platform, the past 24 hours saw about 90,700 liquidated traders with total liquidations valued at about $284 million.

Spot Bitcoin ETFs Driving Market Slumps With Increasing Outflows

Aside from increasing traders’ liquidity, the BTC spot Exchange Traded Fund (ETF) markets have also not been at their best, registering net outflows over inflows in the past few days, hinting at a possible drop in investors’ interests.

Per Lookonchain statistics dated June 21, 2024, the past 1-day and 7-day variables recorded net outflows of about 2,012 BTC valued at around $128.14 million and 9,736 BTC, which cost approximately $620.2 million.

Jun 21 Update:

9 ETFs decreased 2,012 $BTC(-$128.14M).#Fidelity decreased 787 $BTC(-$50.13M) and currently holds 168,075 $BTC($10.7B).#Grayscale decreased 991 $BTC(-$63.15M) and currently holds 279,330 $BTC($17.8B).https://t.co/VwdYGov9Rp pic.twitter.com/6PX8YuWur3

— Lookonchain (@lookonchain) June 21, 2024

Mixed Market Sentiment

Market participants’ sentiments are currently divided, which does not indicate a good prognosis, as it has positioned the market in a directionless trajectory, making it another main driver behind the market slumps.

Having highlighted three factors responsible for the debilitating market outlook, we shall be moving over to the positive angles, which should ordinarily reignite hope among traders still holding on to their coin assets.

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Spot Ethereum ETFs Trading

Like Bitcoin, Ethereum ETF trading will likely kick off next month, with higher tendencies of eliciting cash inflows into Ethereum and eventually trickling down to other crypto with lesser market caps.

Are we here?

If true, we will have the opportunity accumulate for at least a few months ahead of us.

Unless the Ethereum ETFs change the flows dramatically the odds of the below looks pretty decent.

Stuff like Solana looks rekt. Way too many memecoins as well.#Bitcoin pic.twitter.com/Ka2SC9bcON

— JJcycles (@JJcycles) June 24, 2024

Hence, should the ETF tradings set out as anticipated, chances are high that the altcoins’ bull season will coincide within the same period.

Celebrities Influence

Celebrities spewing across sports, movies, and politics have remained bullish and vocal on cryptocurrencies’ potential to revolutionize all areas of life.

Interestingly, Ronaldinho, a soccer star, recently took to his verified X handle, boasting about 21.5 million followers, asserting that it is time for crypto to go mainstream, underscoring his faith in crypto’s revolution potential. However, whether the football star’s intent was purely related to his tweet is uncertain, as it could be an advertising strategy aimed at possibly selling out a coin.

Whale Investors’ Faith Could Cushion Growing Market Slumps

While sell-off sprees seem to be dominating the crypto market, it is worth noting that many of these traders are retailers hoping to make profits by investing on a short-term basis.

On the contrary, large investors have dominated across most cryptocurrency holders’ statistics, which invariably implies that they are hopeful about the propensity of a positive turnaround in the future.

Bitcoin Whale Trades

Clear that whales have been buying this dip in record numbers – but the selling volume does not justify the price drops which are manipulated by the market makers, who work for the whales. 👀 pic.twitter.com/7vibWY40hT

— MartyParty (@martypartymusic) June 24, 2024