Market Deep Dive: BTC Faces Downward Pressure Amid Market Volatility and Mt. Gox Repayments

BTC was unable to surpass USD 64,500 last weekend and continued its downward trend during the course of this past week. This decline was driven by the news that Mt. Gox will start repaying creditors in July (approximately BTC 141,000), combined with general market volatility and a bearish sentiment. Additional factors included selling pressure from the German government, the Nvidia stock sell-off, and negative ETF flows over the past week. On Monday, BTC plummeted to lows of around USD 58,400, with major long liquidations in BTC exceeding USD 180 million, and total market liquidations reaching USD 380 million. However, BTC recovered to highs of USD 62,500 by Wednesday and has since been trading in a range between USD 60,500 and USD 62,500, with markets anticipating OPEX this morning. On a positive note, despite the short-term bearish sentiment, BTC ETFs have recorded modest positive inflows over the past three days.

If BTC is able to push above USD 62,500, the next target would be USD 64,000 (aligned with the 1D EMA100 bands). On the downside, the first support level is USD 60,000, from where it could find additional support around the 1D EMA 200 bands around USD 58,000.

ETH, on the other hand, failed to stay above USD 3,500 over the last weekend, dropping to lows of USD 3,235 before recovering to highs of USD 3,485. It is currently trading below USD 3,450. ETH outperformed BTC week-over-week, gaining 3.5%, with the ETHBTC ratio trading slightly above USD 0.056. The next key resistance level is at 0.0575.

In the altcoin market, VanEck filed for a spot Solana ETF with the SEC yesterday. The markets responded positively to this news, with SOL rising from below USD 140 to above USD 151 before retracing; it is currently trading below USD 145. In my opinion, this was a strategic marketing move by VanEck to gain exposure by being the first to file and to capitalise on pro-crypto US politics. However, this should not be seen as an ETF approval trade, which will likely take more than six months, and may retrace if negative news in the crypto market persists. On the positive side, it reflects well on the crypto asset class as it continues to expand into traditional finance, potentially leading to broader adoption.

The 30-day BTC ATM implied volatility has fallen further to 46%, while the 30-day ETH ATM implied volatility is currently around 60%. Looking at the 25-delta skew, it is negative for BTC for timeframes between 0-14 days, whereas for ETH, the skew is positive across all timeframes. However, with OPEX this morning, this is subject to change.

This afternoon, all eyes are on the Core PCE Price Index data, which will provide further insights into the Federal Reserve’s policy. Key economic events include preliminary German CPI and US Manufacturing PMI data on Monday, JOLTS Job Openings on Tuesday, US Non-Manufacturing and Services PMI data and FOMC Meeting Minutes on Wednesday, and NFPs on Friday.

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