Bitcoin and Crypto Stocks Rebound After Hitting Monthly Lows
Cryptocurrencies and related stocks experienced a partial recovery on Tuesday after bitcoin bounced back slightly from its earlier decline to its lowest point since mid-May.
Bitcoin’s price climbed to $67,300 on Tuesday afternoon, recovering from a morning low of $66,177. This drop marked bitcoin’s first descent below $67,000 in June. Despite the rebound, bitcoin was still down over 3% from its overnight peak of $69,711. Other cryptocurrencies mirrored this decline, showing a broad downward trend.
Steven Lubka, head of private clients at financial services firm Swan Bitcoin, explained that there was no specific event causing this drop. Instead, he suggested that it was likely due to short-term trader activity and positioning.
Ethereum also faced a decline, dropping below $3,500 by late Tuesday and marking a 4.6% decrease over the past 24 hours.
However, cryptocurrency mining companies saw some positive movement after suffering early losses. Marathon Digital (MARA) recovered to a 1.9% gain after a 5.5% drop earlier in the day. Riot Platforms (RIOT) increased by nearly 1% after a 6% decline in early trading. CleanSpark (CLSK) turned around with a 1.6% gain after falling nearly 7% in the morning.
Bitcoin-focused exchange-traded funds (ETFs), such as BlackRock’s iShares Bitcoin Trust (IBIT) and ARK’s 21Shares Bitcoin ETF (ARKB), collectively dropped nearly 3% on Tuesday.
The recent trend of ETF inflows ended on Monday, with spot BTC ETFs recording $64.9 million in outflows, ending a 19-day streak of positive inflows. The Grayscale Bitcoin Trust (GBTC) and Invesco Galaxy Bitcoin ETF (BTCO) led these outflows, losing $39.5 million and $20 million, respectively. BlackRock’s ETF and the Bitwise Bitcoin ETF (BITB) were the only ones that saw inflows on Monday.
Despite the consistent inflows into these spot bitcoin ETFs over the past few weeks, it didn’t result in significant price gains for bitcoin. Lubka noted that while the inflows were substantial, they did not significantly impact bitcoin prices. He attributed some of these inflows to market participants taking advantage of price differences between futures and ETFs through arbitrage, although he mentioned this likely didn’t account for the majority of the inflows.
Lubka pointed out that the bitcoin market is vast, with short-term fluctuations driven by high-volume leveraged trading. Spot ETFs, while significant, are not the primary influencers in the market.
Since their launch on January 11, spot bitcoin ETFs have amassed $15.62 billion in inflows, with BlackRock leading with $17.6 billion. In contrast, Grayscale has seen $17.97 billion in outflows since it transitioned to a spot bitcoin ETF.
Elsewhere in the crypto market, Coinbase (COIN) managed to reduce its losses to 2.3% on Tuesday. The COIN stock is currently in a cup base formation with a buy point at 283.48 and might be developing a handle.
Overall, despite the recent decline, bitcoin’s price has surged 60% this year, reaching an all-time high of $73,798 on March 14.