Crypto News

Bitcoin’s Drop Contrasts With S&P 500 Rally Amid Unique Market Dynamics

Despite the S&P 500’s ongoing rally, Bitcoin has experienced a significant decline, marking a rare divergence between these sectors since the stabilization following the FTX collapse in late 2022.

Typically, such market conditions would see cryptocurrencies experiencing a relief bounce to catch up.

On April 2nd, according to the founder and CEO of CryptoQuant, 2,000 Bitcoin flowed out of U.S. government-seized wallets. While this might seem noteworthy, it represents a relatively small and insignificant amount compared to other sources of sell-side liquidity.

Further insights from IntoTheBlock reveal interesting trends among short-term Bitcoin traders over the past 30 days. The total amount of Bitcoin held by these traders has surged by 13%, despite a 7.5% decrease in the number of addresses in this category. This suggests that short-term traders are consolidating their holdings and taking larger positions.

Bitcoin Net ETFs Market Inflow Continues Its Negative Trend 

Additionally, the Bitcoin ETF market has shown a negative trend. On June 18, 2024, Bitcoin ETF net inflow summed up to a negative $152 million. Notably, no U.S. Bitcoin ETFs saw an inflow on that day. Grayscale’s GBTC experienced an outflow of $62.3 million, while Fidelity’s FBTC led the outflows with $83 million. This negative net inflow has persisted for four consecutive days, indicating sustained outflows from major Bitcoin ETFs.

In summary, Bitcoin’s current downturn contrasts sharply with the buoyant performance of the S&P 500. Market dynamics reveal a shift among short-term Bitcoin traders towards larger consolidated positions, while ETF outflows suggest a cautious sentiment among institutional investors. As these trends unfold, the crypto market continues to navigate a unique and evolving landscape.

Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.

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