With Bitcoin's 6% Crash, Here's Why The Crypto Market Is Down Today (2024)

Forming a massive red candle in the daily chart, the Bitcoin price takes a quick plunge of almost 6% this Friday. With the crypto market ending the week on a bearish note, the BTC price is down by almost 10% with the weekends left.

Currently, the biggest cryptocurrency is trading at $61,592 with an intraday rise of 0.30% to reclaim the $61,000 level after a low of $60,433. Amid the downfall, the bearish ripples lead to a massive supply in altcoins, resulting in a drop under $3,000 in Ethereum, a crash in meme coins, and a market-wide wave of liquidations.

Over the past 48 hours, the crypto market has witnessed a huge wipeout, with almost $500 million in long positions getting rekt. As the bearish powers are rising, let’s find out why the crypto market is crashing today.

Reasons Behind The Fall Of Crypto Market Today:

The Inactive FOMCCrushes Crypto Market Dream

The recovery rally before the FOMC meeting and the positive July CPI data results formed a bullish broader sentiment. Further, the interest of three major US pension funds expressed interest in buying Bitcoin through the ETFs cemented the sentiment.

However, the long-anticipated rate cut was delayed in the FOMC meeting, with the next possible decision in September.Hence, the excitement in the crypto market subsides quickly, resulting in a bearish turn of events.

Massive Outflows In Bitcoin ETFs

On August 2nd, massive daily net flows turned bearish after the FOMC meeting. The total net daily inflow of all the U.S. Spot Bitcoin ETFs was negative $237.45 million. The largest outflow was recorded by Fidelity’s FBTC fund of $104.1 million. Other notable outflows were Ark’s ARKB at $87.68 million and Grayscale’s GBTC at $45.95 million.

In contrast, BlackRock’s IBIT fund on NASDAQ had the highest net inflow of $42.81 million. Thus, the massive outflows brought a catastrophic move in the crypto market.

Mt. GOX Starts Distribution

Earlier this week, despite Mt. Gox distributing Bitcoins worth billions to its creditors, 40% of these were sent to exchanges. With minimal pressure on BTC, the price soared. However, the transfer of $3 billion to exchanges from the $9 billion due, the sell-off wave from the distribution run could fuel the bearish run in the crypto market.

Bitcoin’s Falling Open Interest Warns Off-roading

Amidst the market crash, Bitcoin’s Futures Open Interest dropped by -5.17% in the last 24 hours. Further, the OI-weighted funding rate is declining faster and is down to 0.0085%.

However, on Binance, the biggest centralized exchange, the top traders in the BTC/USDT pair reveal a Long-to-short ratio (Positions) of 1.8582. This ratio means that there are almost 1.86 long positions among the top traders for every short position. Hence, Bitcoin and the crypto market are likely to come back soon.

Read Also: U.S. Inflation Reaccelerates: Core PPI Hits Highest Level Since 2022, What It Meant For Crypto

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