Crypto Market Cap Slumps to $2.1trn on Waves of Selloffs
The crypto market capitalisation plunged to $2.1 trillion over 24 hours, primarily driven by a massive cascade of liquidations that amplified selling pressure.
The market is in the red due to a wave of forced liquidations that wiped out leveraged long positions, creating a self-reinforcing downward spiral. Over $333 million in Bitcoin positions were liquidated in the past 24 hours, with long positions accounting for $217 million.
Top currencies including Bitcoin, Ethereum, Binance Coin, Ripple’s XRP and other altcoins are tracking lower. This selling pressure from forced closures pushed prices lower, triggering more liquidations in a negative feedback loop.
The market is experiencing a classic deleveraging event. High leverage built up during the recent downturn is being rapidly unwound, exacerbating the price drop.
A sustained drop in total open interest, currently $395.9 billion, and a return to positive funding rates would signal the liquidation pressure is subsiding.
U.S. spot Bitcoin ETFs saw net outflows of $1.72 billion for the week ending June 5, as reported by DeepWhale. Concurrently, social media discussions highlight fears that strong jobs data could delay Federal Reserve rate cuts, tightening liquidity for risk assets.
Institutional capital is retreating, removing a key source of buy-side support. The market’s 55% correlation with Gold suggests investors are treating both as hedges against potential inflationary or economic instability.
The total market cap is testing a critical support level at $2.1 trillion, which aligns with the yearly low. The immediate trigger to watch is the SpaceX IPO on June 12, which could divert risk capital from crypto.
Technically, a reclaim of the $2.23 trillion level is needed to signal a short-term recovery. The market is at an inflexion point. Holding support could attract bargain hunters, but failure could lead to a test of lower supports near $1.9 trillion.
The market’s decline is fueled by a technical unwind of excessive leverage, compounded by institutional outflows. A sustained recovery likely hinges on a stabilisation in ETF flows and a shift in macro sentiment.
