Is the Summer Slump Starting? Crypto Funds Have Their Biggest Weekly Outflows Since Late March

Original title: "Has the "Summer Slump" begun? Crypto funds have seen the largest weekly outflow since the end of March"

Original author: Mary Liu, BitpushNews

The crypto market faced downward pressure at the opening of Monday.

Bitpush data showed that Bitcoin fell below the $66,000 support level in early trading and hit a low of $65,046 at noon. A surge in buying then pushed the price back to $67,286, but the bullish momentum failed to continue. As of press time, the price of Bitcoin was $66,580.16, with a 24-hour volatility close to 0%.

On Monday, only 5 of the top 200 tokens by market value rose by more than 1%, with Convex Finance (CVX) leading the way with a 25.3% increase, followed by cat in a dogs world (MEW), which rose by 19.7%; and XRP, which rose by 5.8%. zkSync (ZK) fell the most, down 24.3%; io.net (IO) fell 22.1%; and ConstitutionDAO (PEOPLE) fell 18.7%.

The current overall market value of cryptocurrencies is $2.41 trillion, and Bitcoin has a market share of 54.6%.

In the traditional market, AI-related concept stocks remain hot, with the SP 500 and the tech-heavy Nasdaq 100 continuing to climb to record highs, up 0.9% and 1.2% respectively.

Some analysts have adjusted their target values for the SP 500 this year, with Evercore ISI raising its target price to 6,000 by the end of this year and Goldman Sachs predicting the index will reach 5,600.

Will the first rate cut be in September or at the end of the year?

Investors currently see a 64% chance of a rate cut in September, according to the Chicago Mercantile Exchange's FedWatch tool.

However, Minneapolis Fed President Neel Kashkari said in an interview with CBS on Sunday that the central bank may cut interest rates once this year and will wait until December, which is a "reasonable forecast."

Bitpush previously reported that the Federal Reserve kept its benchmark interest rate in the range of 5.25%-5.50% last week, marking that the rate has remained at that level for nearly a year.

The year-over-year change in the personal consumption expenditures price index, the Fed’s preferred inflation measure, was 2.7% in April, well above the Fed’s 2% target.

“We need to see more evidence that inflation is moving back down to 2%,” Kashkari said. “Right now we are in a very good position to slowly get more inflation data, more economic data, more labor market data before we make any decisions. We are in a good position, but if you just say there will be one rate cut, as the median shows, it will probably be before the end of the year.”

The summer doldrums have begun

Since March, Bitcoin has been trading sideways in a narrow range. Alex Thorn, head of research at digital asset investment firm Galaxy, noted in an X post that Bitcoin’s 30-day realized volatility has fallen to near its lowest level ever, highlighting the boring price action.

In addition, CoinShares' June 17 report showed that digital asset exchange-traded products and funds had outflows of $600 million last week, the largest outflow since March 22, and the total assets under management of crypto funds fell from $100 billion to $94 billion.

CoinShares data showed that global digital asset investment product trading volume last week was also lower than the weekly average of $22 billion this year, at $11 billion, and the trading volume of US spot Bitcoin ETFs was $8.73 billion, but it was still far below the peak of $32.69 billion in the week of March 4-8.

The cryptocurrency market "is losing momentum" due to a lack of catalysts for traders to take action. “Despite all the positive predictions, new markets need real news to drive and maintain traction,” the company said in a Telegram update earlier today.

Analysts at Secure Digital Markets believe that “investors are ‘flying to quality’ after the Fed’s hawkish stance. During periods of market uncertainty, investors move capital from riskier investments to safer assets to minimize losses and preserve capital.”

ByteTree chief analyst Charlie Morris said on-chain data suggests that Bitcoin’s weakness will continue for at least a few months as “the value of dollar transactions has fallen.”

Morris wrote: "I don't know how long this will last, but this seems to be a decisive change. This suggests that we should not be surprised by a breakout to the downside. Predictions that the halving will push Bitcoin to new highs have been dashed. Despite strong ETF inflows this year, prices have continued to hit resistance above $70,000. Today, prices are back below the 30-day moving average and the trend has fallen to 2/5. However, it remains in a long-term uptrend."

Morris said: "My thesis has not changed, that is, Bitcoin will break out in October after a summer vacation. This happened in 2016 and 2020. After the halving, the Bitcoin network took a six-month break before stabilizing from the pre-halving hype."

According to market analyst TedTalksMacro, this week is critical for Bitcoin. He analyzed on the X platform: "For the next week, it is crucial for Bitcoin to maintain the support level of $66,000. Once it falls below, sellers may dominate the market and force longs to liquidate quickly."

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