Thursday morning was a sea of red in the cryptocurrency industry as most tokens suffered a harsh reversal. Bitcoin triggered those losses as it plunged below $64,000.
Spot ETF outflows coincided with Mt.Gox liquidations, which are expected to continue on Thursday. Kraken has completed its distributions, while Bitstamp is expected to start its distributions on Thursday.
Data by Lookonchain showed that spot Bitcoin ETFs shed 1,394 coins worth $92.6 million on Wednesday. The Bitwise Bitcoin ETF (BITB) was the biggest loser, losing 1,088 coins, followed by the VanEck Bitcoin Trust (HODL) and Ark Bitcoin ETF (ARKB).
It also dropped amid low funding rates in most exchanges. In a note, Cryptionary, a highly followed analyst, noted that Bitcoin would bounce back after hitting $64,000.
Technically, this sell-off happened as Bitcoin failed to break the important resistance at $68,435. This level was important since it was along the falling trendline that connected the highest swings since March and was the upper side of the broadening wedge pattern. In most cases, this pattern results in a bullish breakout.
Bitcoin price chart
Additionally, the crash happened as fear spread in the broader financial market. In Wall Street, the Nasdaq 100 index retreated by over 854 points after mixed financial results from Tesla and Alphabet, the parent company of Google and YouTube. The Dow Jones shed 505 points, while the S&P 500 index retreated by 130 points.
Mog Coin, Lido, ENS tokens lead the sell-off
Bitcoin’s sell-off triggered a big sell-off among other altcoins. Mog Coin token led these losses, falling by 13.20%. It was followed by Lido DAO (LDO), the biggest DeFi industry player whose token fell by 10.3% since yesterday.
Brett, the biggest meme coin in the Base Blockchain, dropped by 10.3%, while Ethereum Name Service (ENS), Fantom (FTM), Helium (HNT), and Starknet (STRK) fell by over 9%.
Looking ahead, Friday’s Personal Consumption Expenditure (PCE) data, the Fed’s favorite inflation gauge, will be the next potential catalyst for Bitcoin and other altcoins.
Economists expect the report to show that inflation continued falling in June, a move that will likely trigger a rate cut as early as in its September meeting. Cryptocurrencies and other risky assets do well when the Federal Reserve turns dovish, as we saw in the first quarter of this year.
