ETF Outflows Still Weigh on Bitcoin
Bitcoin weakened again in Wednesday's European trading session (June 24), extending the pressure that has been present since the beginning of the week. Bitcoin moved around US$62,600 to US$62,800, still stuck near its yearly low after the crypto market lacked new positive sentiment. This pressure arose as global investors remained cautious about risky assets, especially after a major sell-off hit technology and semiconductor stocks.
Risk-off sentiment was one of the main reasons why Bitcoin struggled to recover. The sharp correction in technology stocks, particularly those related to artificial intelligence and chips, prompted investors to reduce exposure to volatile assets. Although some funds were leaving technology stocks, the flow was not significant into crypto. Investors appeared to be preferring to hold cash or shift to assets considered safer amid market uncertainty.
Another pressure came from expectations of high interest rates in the United States. Following last week's hawkish Federal Reserve meeting, the market is increasingly pricing in the possibility of an interest rate hike before the end of the year. This situation is unfavorable for Bitcoin because high interest rates make riskier assets less attractive. Furthermore, the strong US dollar is also dampening interest in crypto, as global investors tend to favor dollar-based assets.
Market participants are now awaiting this week's US Personal Consumption Expenditures (PCE) inflation data. This data is the Fed's favorite inflation indicator and could determine the direction of future interest rate expectations. If the PCE shows persistently high inflation, pressure on Bitcoin could continue, as the market will be increasingly convinced that the Fed remains hawkish. Conversely, if inflation begins to subside, Bitcoin could have room for a technical rebound.
In terms of capital flows, pressure on Bitcoin is also evident in the ongoing outflow from spot ETFs. Although the rate of withdrawals has slowed in recent weeks, there are no strong signs that capital flows are turning into major inflows. This situation indicates that institutional interest in Bitcoin remains restrained, especially when AI stocks and other assets with clearer earnings fundamentals have previously attracted investor attention.
Outside of Bitcoin, most altcoins also moved weakly. Ethereum hovered around US$1,670, while several major tokens such as XRP, Solana, BNB, Cardano, Dogecoin, and TRUMP coin also experienced pressure. However, the medium-term sentiment for the crypto industry isn't entirely negative. Bank of America still sees positive opportunities in Coinbase, especially if US crypto regulations like the CLARITY Act provide greater legal certainty and open up space for the growth of derivative products like perpetual futures.
Source: Newsmaker.id
