Bitcoin’s price has seen a drop of 3.5%, sinking to $67,689 at press time. This reinforced the resistance at the $69,000 mark, highlighting Bitcoin’s struggle to maintain its highs. Right now, BTC is trading 8% below its all-time high of $73,835. This recent price action has sparked a broad market correction.
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Bitcoin’s drop below $68,000 at the Wall Street opening on May 31 triggered a broader market sell-off. The global crypto market capitalization fell by 2.2% in 24 hours, resting at $2.5 trillion, according to data from CoinGecko. This significant drop has raised concerns among investors and traders alike.
Memecoins Take a Hit
Alongside Bitcoin, memecoins also faced a downturn. DOGE and SHIB, which had shown impressive performance recently, were not spared. Shiba Inu’s SHIB fell by 7%, reflecting the market’s broader trend. In Solana’s ecosystem, new memecoins like Dogwifhat (WIF) and Book of Meme (BOME) saw losses of over 5.8%.
The broader liquidation of long positions versus short ones has further fueled BTC’s underperformance. The Bitcoin derivatives market saw approximately $144 million in liquidations within the last 24 hours, with $105.14 million of that being long positions. Liquidating long positions generally involves selling the asset, which can push the price down further.
Bitcoin’s open interest (OI) has flattened around $33 billion, lower than its 2024 peak of about $39.3 billion. This flattening suggests a potential decrease in speculative trading or a drop in overall market confidence. The funding rate remains positive at 0.016% per week, indicating that longs are willing to pay shorts to keep their positions open. However, this rate has dropped significantly from its 2024 peak of over 2% per week, pointing to shifting trader expectations about future price movements.
Spot Bitcoin ETFs Are Thriving
Data from Farside Investors reveals $1.96 billion in net inflows into U.S. spot Bitcoin ETFs since May 15. This amount is equivalent to 64 days of BTC issuance from miners. The U.S. spot Bitcoin ETF market has now exceeded $50 billion in assets under management.
In comparison, U.S. gold ETFs hold about $118.5 billion, according to the World Gold Council. These inflows typically lead to the withdrawal of Bitcoins from exchanges, which has now dropped to its lowest level since March 2018—2.3 million BTC, as per Glassnode data.
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While it’s not certain these coins will be sold in the near term, their transfer to cold storage and custodians outside of exchanges usually reduces market liquidity. This issue becomes more pronounced in bull markets, where thinner order books at higher price levels can amplify price movements due to aggressive buying.
Cryptopolitan reporting by Jai Hamid
