Crypto Market Drops 3% as Bitcoin Falls 0.7%

The crypto market has experienced a slight downturn after a brief period of upward movement, with nearly all top 100 coins recording price decreases over the past 24 hours. The total market capitalization has decreased by 3% to $3.41 trillion. Bitcoin (BTC) has decreased by 0.7% and is currently trading at $104,737. Ethereum (ETH) has appreciated by 0.5% and is now changing hands at $2,614. Tron (TRX) is the only gainer in the top 10 coins, appreciating by 1.7% to $0.2731, while Dogecoin (DOGE) has seen the highest decrease of 3.5% to $0.1892. Only five of the top 100 coins have seen their prices increase, with Tron being the best performer, followed by Tokenize Xchange (TKX) with a rise of 0.9% to $31.37. Monero (XMR) has dropped the most, by 8.1% to $318.

According to Glassnode, Bitcoin’s increase to the all-time high has met growing resistance, as market data points to exhaustion from earlier buyers and profit-taking by long-standing holders. Many of the strong accumulation zones from previous cycles have turned into active selling regions. The largest BTC holders are now back in accumulation, with the strongest activity in the 10–100 BTC and <1 BTC groups, both reaching a score of 1.0 – the highest possible. The market appears to be at a crossroads, shaped by elevated sell pressure, maturing bullish momentum, and demand that must prove itself resilient. The coming weeks will be crucial in determining whether this is a mid-cycle consolidation or the start of a broader top formation.

Nick Forster, Founder of decentralized onchain options platform Derive.xyz, suggests that market makers are currently short gamma. To maintain their hedge, they need to buy more BTC as the price increases, creating a positive feedback loop that drives up demand. However, there’s a “gamma hole” at $110,000, where market makers will be forced to stop buying, as they become gamma-neutral. This suggests that even if BTC rallies, the price is likely to remain capped at $110,000. There is currently an 11% chance for BTC to surpass $125,000 by the end of September, a decrease from 18% last week. The chance of ETH settling above $3,000 by the end of September has increased from 22% to 24%. Long-dated (180-day) BTC volatility has been on a downward trend, falling from 56% to 46% in two months, likely due to Strategy raising funds and selling calls into the market, reducing volatility. Over 57% of all BTC contracts traded on Derive.xyz were puts, indicating that traders are bearish on BTC in the short term. The skew has shifted toward a more neutral to slightly bearish outlook.

BTC currently trades at $104,737, failing to hold the $105,000 level and reaching the intraday high of $105,910 before pulling back. Compared to its all-time high of $111,814, the coin is down 6.1%. It decreased by 2.8% in a week and rose by 10.9% in a month. Ethereum’s intraday high was $2,667. It’s down 4.3% in a week and up 45.2% a month, outperforming BTC on the monthly basis. The Fear and Greed Index has dropped deeper within the neutral territory towards a bearish outlook, now standing at 55. It previously jumped to the extreme greed of 76, one day after BTC had hit its all-time high. The sentiment signals caution in the market, with fear slowly moving in. Whether it will rise to greed or drop to fear will depend on the factors within the market itself and investors’ reaction to them.

On 4 June, US BTC spot exchange-traded funds (ETFs) recorded a net inflow for a second day in a row, adding $86.92 million to the total of $44.57 billion. BlackRock saw inflows of $283.96 million, while Fidelity bled out $197.04 million. US ETH spot ETFs continue the inflows streak of thirteen consecutive days, gaining another $56.98 million on 4 June. BlackRock leads this list with $73.18 million. The crypto market is still sensitive to news coming out of the US. Recent Automatic Data Processing (ADP) data showed 37,000 created jobs, the slowest private-sector hiring pace in two years. In response, Donald Trump once again called for the Federal Reserve Chair Jerome Powell to cut interest rates. A drop in interest rates would be beneficial for the crypto market, as lower rates reduce the cost of borrowing, making risky assets more attractive, resulting in new money pouring into crypto. However, lower rates may lead to inflation.

The crypto market saw a wide, albeit minor, decrease over the past 24 hours, while the stock market recorded a mixed picture at closing. The S&P 500 has increased by 0.0074%, the Nasdaq-100 is up 0.27%, and the Dow Jones Industrial Average fell 0.22%. The two do not seem to be moving in tandem currently. Stocks reacted to Donald Trump’s renewed calls for a Federal Reserve rate cut. Lower rates can boost stock prices but can also lead to inflation. Analysts still argue that the current drop in market cap and prices of major cryptos is a part of a typical post-ATH pullback. However, they also note that the market is at a crossroads. Investors should keep in mind the market’s continued sensitivity to macroeconomic developments that may turn a short-term pullback into a bearish trend.