The cryptocurrency market capitalization took a steep 3.9% dive on June 20 and June 21, reaching a five-week low of $2.34 trillion. This downturn impacted all the top-10 coins, with Bitcoin (
BTC
) dropping 4.2%, Ether (
ETH
) experiencing a 4% loss, and BNB (
BNB
) facing a 4.2% correction. Despite some recovery of intraday losses, the market remains bearish.
Some analysts attributed this large sale of Bitcoin to the German government, but it’s important to note that traditional finance investors reacted to unfavorable macroeconomic data. Concerns about the stock market reaching its peak and weakening U.S. fiscal conditions were among the factors that contributed to the market downturn.
A wallet linked to the
German government
reportedly transferred 6,500 BTC to exchanges on June 19, worth $425 million at the time. The wallet was believed to hold nearly 50,000 Bitcoin seized from the pirated movie website Movie2k. However, this theory was contradicted by the U.S.-based business intelligence firm
MicroStrategy, which disclosed
the purchase of an additional 11,931 BTC for $786 million on June 20, effectively covering the selling pressure.
With no other regulatory changes or events negatively impacting cryptocurrency sentiment, attention should be focused on the traditional finance industry, particularly on macroeconomic data. The U.S. stock market was facing a “triple witching” event with $5.5 trillion set to expire on June 21, and weaker macroeconomic data indicating a higher recession risk.
Existing home sales in the U.S. fell for the third consecutive month in May, while the manufacturing and services PMI readings for France and Germany came in below expectations. Similarly, private-sector companies in the United Kingdom reported slower growth than expected, and Japan’s inflation rose to 2.8% in May.
Gennadiy Goldberg, head of U.S. rates strategy at TD Securities,
stated
that the U.S. debt ceiling is expected to
create a standoff
and potentially trigger another sovereign credit rating downgrade. The U.S. dollar Strength Index (DXY) rose to its highest level in fifty days at 105.85, indicating that investors are moving away from the euro, British pound, Swiss franc, and similar currencies.
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.