Frayed Hopes and Falling Stocks Sink Crypto Market
Dreams of lower U.S. interest rates vanished once again, and a major plunge in GameStop shares plunged the crypto market into despair. After flirting with record highs earlier on Friday, Bitcoin retreated, wiping out most of its weekly gains. The broader crypto market witnessed an even steeper selloff as speculative fervor waned. Despite record inflows into spot Bitcoin ETFs, the rally couldn’t be sustained.
Bitcoin Briefly Touches All-Time High Hopes, then Plummets
Friday’s initial ascent towards all-time highs for Bitcoin (BTC) quickly reversed course during U.S. trading hours. The world’s leading cryptocurrency barely clung to a weekly gain by the time of writing. Bitcoin was trading at $69,000, reflecting a 2.5% dip over the past 24 hours. This fared better than the broader CoinDesk 20 Index, which plummeted 5% in the same period. Among the CoinDesk 20 assets, Ether (ETH) dropped 4%, while Tezos (XTZ) and EOS (EOS) witnessed a 10% decline. Solana (SOL) also felt the heat, falling 7%. According to Coinglass data, the selloff triggered a staggering $450 million in liquidations, the highest figure since the mid-April downturn.
Perfect Storm: U.S. Jobs Report, Fed Policy, and GME Disappointment
Bitcoin’s descent began after a stronger-than-anticipated U.S. jobs report for May revealed 272,000 new positions. This dashed hopes for an immediate interest rate cut by the Federal Reserve, leading to a significant rise in interest rates and the U.S. dollar.
The crypto selloff intensified hours later when “Roaring Kitty,” a revered trading icon, held his first highly-anticipated YouTube livestream in years. Viewers expecting a major announcement were likely left disappointed as he offered only modest updates on his belief in GameStop’s long-term transformation under current management. GME shares, already down for the day, took a further nosedive during the broadcast, closing the session 40% lower. The GME meme coin mirrored this decline, dropping 50% from its Friday highs. Other meme coins weren’t spared either, with Dogecoin (DOGE) falling 8%, Shiba Inu (SHIB) down 10%, and Pepecoin (PEPE) tumbling 15% over the past 24 hours.
Bitcoin Buildup: A Puzzling Conundrum for Enthusiasts
Bitcoin enthusiasts remain perplexed by the factors hindering a sustained breakout. Spot Bitcoin ETFs achieved an unprecedented 18th consecutive day of inflows on Thursday, surpassing even the surges of February and March. During this 18-day period, these ETFs amassed over 56,000 Bitcoins according to HODL Capital, nearly seven times the amount mined in that timeframe. However, even this record accumulation couldn’t prevent the market’s collapse.
