The old saying – sell in May and go away – proved to be right once again for the cryptocurrency markets. It was just six weeks ago when bitcoin had evidently reclaimed the $80,000 level and even surged to a multi-month peak at almost $83,000. The sentiment was gradually improving and there were even calls for $100,000 by the summer.
However, the tides turned viciously and the asset was rejected vigorously. Its decline since then has been nothing short of painful, dumping below $60,000 earlier today for the second time in June.
Is This Why?
Popular analyst Ali Martinez brought out the Coinbase Premium metric earlier today as the markets were crashing to fresh low. CryptoPotatoreported when BTC dumped below $60,000 but managed to maintain above the $59,000 level and has now reclaimed the former.
According to Martinez, though, the metric that stands out the most for the past six weeks or so is the one that tracks how much BTC costs on Coinbase compared to Binance. In general, if the Premium is in the green, it means US investors (typically institutions) are accumulating bitcoin en masse on Coinbase, pushing its price there above the levels on international exchanges.
However, the last 46 days have not seen such green days. Or, as Martinez put it:
“A negative premium means BTC is trading cheaper on Coinbase, suggesting that US institutional buying pressure has dried up.”
He believes this slowdown mimics the massive investor exodus from the US-based spot Bitcoin ETFs. The funds have bled approximately $5 billion in essentially the same timeframe because “American smart money appears to be sitting on the sidelines, waiting for macroeconomic clarity before re-entering the accumulation phase.”
Bitcoin Coinbase Premium. Source: CryptoQuant (and Ali Martinez)
Other Plausible Reasons
As we recently noted, the ETFs are indeed among the many possible reasons behind BTC’s latest leg down. Others include the uncertainty around the war against Iran, strengthening dollar, or even some OG investors selling off. However, another biggie that stands out is the FUD around Strategy and its Stretch shares.
STRC has dumped below its par price of $100, currently trading at a hefty discount at $80. This essentially increases the pressure that the BTC-buying machine is under as the ‘flywheel’ effect is disrupted and the company now has to pay higher yield. According to some analysts, this could result in massive BTC sales from Strategy.
