Bitcoin, the premier cryptocurrency by market capitalization, experienced a decline of over 2%, dropping to $67,900. This decrease extends its retreat from recent peaks near $72,000. Similarly, Ethereum, the second-largest cryptocurrency, saw a dip, falling below $3,550 at one point.
These losses followed a significant $64.9 million in cumulative outflows from U.S.-listed spot Bitcoin exchange-traded funds (ETFs), marking the first such decline since at least May 23, according to provisional data from Farside Investors. Despite recent strong inflows, market discussions suggest that institutional interest in non-directional basis trades, rather than outright bullish bets, is driving these investments.
Traditional Markets and Economic Indicators
In the traditional financial markets, Chinese stocks dropped over 1%, leading to losses in Asian equity indices. This decline is attributed to ongoing property market concerns and speculation that the Bank of Japan might reduce its liquidity-boosting bond purchases this week.
The dollar index, which measures the U.S. dollar against a basket of major fiat currencies, consolidated its gains over the past two days. Meanwhile, U.S. Treasuries, often considered a safe haven, saw an uptick in prices, resulting in lower yields. The yield on the benchmark 10-year note decreased by three basis points to 4.45%, as reported by TradingView.
Political Developments and Market Sentiment
Recent electoral gains for right-wing parties in Europe and the announcement of a snap poll in France have reignited concerns about the European Union’s stability, adding to market uncertainty.
Investors are also closely watching for key economic data and policy decisions. The upcoming U.S. Consumer Price Index (CPI) release and the Federal Reserve’s rate decision on Wednesday are particularly anticipated. The Federal Open Market Committee (FOMC) will reveal its latest quarterly projections, including the interest rate dot plot, which will be closely scrutinized by market participants.
