Key Points
- Increased outflows from Bitcoin and Ethereum due to negative market sentiment.
- Potential distribution of assets by defunct exchange Mt.Gox could cause further decline in cryptocurrency values.
Crypto investment products experienced significant inflows for the second week in a row, as per a recent report from CoinShares.
Last week, outflows were valued at $584 million, bringing the total outflows over two weeks to $1.2 billion.
Bitcoin and Ethereum Outflows
The highest outflows were from Bitcoin (BTC), amounting to $630 million. This was attributed to a pessimistic outlook among investors and anticipated interest rate cuts.
Ethereum (ETH) followed with an outflow of $58.30 million. This was unexpected as the broader market anticipated the Ethereum spot ETFs to start trading in July, which should have induced optimism.
The trading volume of Exchange Traded Products (ETPs) also declined to $6.9 billion, the lowest since the 10th of January ETF approval.
At the time of reporting, Bitcoin was priced at $60,028 and Ethereum was trading at $3,349.
Potential Impact of Mt.Gox Distribution
The initial drop in prices may be connected to the announcement that Mt.Gox intends to repay creditors with $9 billion worth of BTC starting from July.
Mt.Gox, a Bitcoin exchange that went bankrupt in 2014 following a hack, could cause a market collapse if the distribution begins and recipients decide to sell off their coins.
This could potentially cause Bitcoin to drop to $54,000. However, the anticipated commencement of Ethereum ETFs live trading could protect it from further correction.
If Ethereum manages to resist another price drop, it could trigger an altcoin season.
Meanwhile, Bitcoin’s volume was nearing its monthly high at $42.86 billion. The high volume indicates more selling than buying, given the decline in Bitcoin’s value.
Ethereum’s Market Cap in BTC Terms
At the time of writing, Ethereum’s on-chain volume was $22.76 billion. If the bullish investors manage to defend Bitcoin, its price might rebound to $63,000.
For Ethereum, the value could revisit $3,500. However, if selling pressure increases, the prices could hit new quarterly-lows.
