Major outflows from largest BTC ETF may have triggered crypto crash

$BTC 24 Hour High $21,708 / Low $20,332 |   $BTC +0.4% Past 24 hours; -6.9% Past 7 days

Good morning. $BTC holds steady above the psychological $20,000 level amid stock gains. Major altcoins also recovered their prices from last week’s crypto crash and spent much of the day in the green. Perhaps the latest outflow data can explain the potential reasons behind the crash. Not only were there major outflows from BTC short funds last week, digital funds also saw a net outflow of $39 million, and its total AUM dropped to $36.3 billion, the lowest since February 2021. Further, Purpose BTC ETF, the largest BTC ETF, also suffered from enormous outflow, thus slashing half of its AUM. 

In the past 24 hours, the bulls managed to protect $BTC and $ETH from diving below the key support levels. $BTC is trading at $20,500, with an intra-trading range of 4-5%. Should the bears get more aggressive, $BTC may slide towards $20,000 and then $18,500. The weekly (14-period) RSI is hovering in the 20s area, one of the lowest levels of all time. Based on the significant amount of bearish activities on the daily chart and its green candles’ size over the past few days, the current downtrend is likely to persist. 

$ETH reclaimed the $1,100 area slowly in the past 24 hours. The long-term downtrend of the No. 2 digital asset remains intact while its MACD is mounting. The ETH/BTC ratio currently stands at 0.054, higher than the previous bear markets’ (0.02-0.03). It’s worth noting that some major altcoins such as $UNI and $SUSHI have already plunged by 80-90% from their peaks. Given the expected further downside in the short term, some investors might refrain from buying the dip to avoid catching a falling knife. 

The recent bullish news has had little impact on the crypto markets. Remember that this is one of the first times we have experienced a global recession during a bear market. Our eyes are now on the Federal Reserve Chair Jerome Powell’s testimony before the Congress on Wednesday and Thursday. His regular, semi-annual updates on monetary policy will significantly affect crypto’s market directions in the coming months. 

In other news, Sam Bankman-Fried fortified the stumbling $900 billion digital asset industry with his second bailout of a crypto firm after rescuing broker Voyager. Bankman-Fried’s exchange has extended a $250 million loan to BlockFi. The billionaire is building a crucial role similar to the authorities that rescued banks in the 2008 financial crisis. Large exchanges have continuously bailed out projects or companies that have some adversity to bolster the long-term industry growth.

Learn more from today’s Trader View video.

Digital Assets Market:

  • Total crypto market capitalization stands at $953B, +0.7% from yesterday
  • $BTC is -0.45% at time of writing; 24H liquidations and funding rates: 49.35M, -0.00490%
  • $ETH is -0.40% at time of writing; 24H liquidations and funding rates: 43.78M, +0.02579%
  • Stablecoins market dominance: USDT 44.07%; USDC 36.42%; BUSD 11.21%; DAI 4.10%

Alts and DeFi watch:

  • DeFi TVL: $73.85B (+2.60% over last 24 hours)
  • $SOL +3.3% in the last 24 hours, +21.8% in the past week
  • $SHIB +27.5% in the last 24 hours, +28.9% in the past week
  • $SAND +4.4% in the last 24 hours, +2.1% in the past week
  • $ENJ +1.5% in the last 24 hours, +2.6% in the past week

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OSL Trader View is contributed by Terrance Leung, Tiffany Wee & Melvin Gallu.

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