(Bloomberg) — Losses are piling up in the crypto market after the second-worst weekly decline of 2024, reflecting weakening demand for Bitcoin exchange-traded funds and uncertainty over monetary policy.
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A measure of the 100 largest digital assets fell about 5% in the seven days through Sunday, the worst decline since April, data compiled by Bloomberg showed.
Market leader Bitcoin lost about 2% to trade at $62,275 as of 7:05 a.m. in London on Monday, a more than a month low, hurt by a six-day streak of outflows from U.S. ETFs for the token.
The cracks in crypto stem from doubts about the Federal Reserve’s ability to quickly cut interest rates from 20-year highs. For some analysts, the decline in digital assets is a warning sign of broader risk appetite.
The current crypto market dynamics are “characterized by low volatility, soft volumes and order books that become unbalanced as prices start to move towards the edges of their range,” David Lawant, head of research at FalconX, wrote in a note.
The declines in some corners are particularly striking: the series of weekly declines for Ether and Solana are the longest since last year and 2022, respectively.
That’s even as fund companies prepare to launch the first U.S. ETFs to invest directly in Ether, the second-ranked crypto asset. Solana, meanwhile, was very recently a favorite of several digital asset hedge funds.
Bitcoin hit a record high of $73,798 in March, but is lagging behind traditional assets such as stocks, bonds and gold this quarter. According to IG Australia Pty market analyst Tony Sycamore, the 200-day moving average of around $57,500 is now in the spotlight as a possible support zone for the price.
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