Cryptocurrency analysis agency 10X Research released an analysis report today indicating that the cryptocurrency market is currently facing various pressures, including excessive futures positions, significant altcoin unlocks, potential selling of Bitcoin and Ethereum, and outflows of Bitcoin spot ETF funds.
Cryptocurrency market has been falling continuously since early June, with BTC dropping from a high of $72,000 on the 7th to a low of $64,569 today. Despite some minor rebounds afterwards, there is still no clear upward trend, with the price reported at $65,445 before the deadline. Additionally, altcoins led by ETH have suffered significant losses in this downward trend, with ETH, SOL, and BNB falling by 14%, 28%, and 20% respectively.
In this context, the analysis agency 10X Research released an analysis report today highlighting several downward pressures in the cryptocurrency market:
After the approval of the 19b-4 application by the U.S. Securities and Exchange Commission (SEC) on May 23, we pointed out on June 3 that “speculative positions in ETH in the market have reached the limit, which may face liquidation risks, potentially preventing Bitcoin from reaching new historical highs.” Despite the recent decline in ETH, ETH futures positions are still excessive, which may indirectly lead to more altcoins being liquidated.
Last week (6/10~6/16) was a crucial moment for cryptocurrencies and one of the most critical weeks of 2024, as the market struggled to digest a series of massive token unlocks totaling $483 million, including Aptos ($97 million), IMX ($51 million), STRK ($75 million), among others. Early investors and venture capital institutions seem to be under pressure to cash out, leading to an overall market decline and dragging down Bitcoin prices.
Bitcoin miners have started selling their BTC inventory, with the balance on exchanges increasing by $2.5 billion, potentially bringing in selling pressure. Despite improvements in inflation data, large-scale outflows of funds have been observed in Bitcoin spot ETFs (average outflow of $660 million over 5 days). Meanwhile, total net outflows in various areas (stablecoins, futures leverage, ETFs, etc.) have reached $2.4 billion, marking the third consecutive week of net outflows since the introduction of Bitcoin spot ETFs in January 2024.
With Solana breaking the key trend line and support level against USDT, the token may face further downward pressure.
“Net flow” refers to the difference between the inflow and outflow of funds during a specific period of time. It reflects whether there is more money entering or leaving the market during that period. Net flow can be a positive value (indicating more inflow than outflow) or a negative value (indicating more outflow than inflow).
QCP Capital: Bitcoin miners surrender restricting BTC’s rise
Furthermore, according to previous reports by Cryptosphere, digital asset trading company QCP Capital stated that they believe this is because Bitcoin miners are experiencing post-halving “surrender,” directly limiting price increases.
Bitcoin miners mainly rely on two sources of income: mining rewards and transaction fees, which must exceed mining costs to be profitable. Therefore, miners need to consider the following points to avoid exiting the mining industry:
Increase in transaction fee income
Rise in Bitcoin price
Reduction in mining costs
However, the completion of the fourth Bitcoin halving in April reduced the block reward for miners from 6.25 BTC to 3.125 BTC. While the Bitcoin Rune protocol once allowed miners to earn substantial transaction fees, the rapid decline in this protocol led to a sharp decrease in transaction fee income, resulting in more unprofitable miners exiting the industry and surrendering. QCP Capital believes that this situation limits the rise in Bitcoin prices.