Crypto markets: the great sell-off explained in five points

Bitcoin is trading around $60,000 on Monday, barely above the $58,000 hit on 25 June, its lowest level since October 2024. The rest of the crypto market (excluding Bitcoin and stablecoins, cryptocurrencies pegged to the dollar) stands at roughly $560 billion after a sharp weekly decline. Ether (the second-largest cryptocurrency) is barely holding the $1,570 line.

Over the past 24 hours, approximately $206 million worth of leveraged positions (amplified bets on price moves, up or down) were forcibly liquidated, with 79% of those involving traders who had bet on Bitcoin going up.

The market sentiment index (Fear & Greed) has dropped to 16, deep in the "extreme fear" zone.

A crisis born in traditional markets, not in crypto

The downturn did not start in crypto. Under Chair Kevin Warsh, the US Federal Reserve raised its year-end policy rate projection to 3.8% (up from 3.4%), burying hopes of rate cuts in 2026 and even leaving the door open to a hike.

Headline inflation stands at 4.2% year-on-year (and 3.3% for the core PCE measure, which strips out the most volatile components). The US 2-year Treasury yield sits at 4.1%, driven by an oil shock earlier this year. The Nasdaq (the tech-heavy stock index) fell 4.6% last week across five consecutive losing sessions; the S&P 500 lost 2%.

Bitcoin, whose price action has been highly correlated with the Nasdaq since late May, followed the move and then amplified it, true to its role as "the Nasdaq with leverage."

ETF flows confirm the institutional retreat

US spot Bitcoin ETFs are on their seventh consecutive week of net outflows. Daily redemptions have accelerated from $113.8 million to $439.67 million in the latest session.

In total, $1.9 billion has flowed out of crypto ETFs, creating substantial selling pressure that pushed prices down more than 5% over the week (roughly 6.35% for Bitcoin, 7% for the rest of the market).

Altcoins take the hit

Bitcoin dominance (its share of total crypto market capitalisation) has climbed to 58%. The CoinMarketCap Altcoin Season Index reads 49 out of 100, meaning we are in "Bitcoin season" (Bitcoin is capturing most of the flows, not smaller cryptocurrencies).

The ether-to-bitcoin ratio continues to grind lower, which historically precludes any meaningful altcoin rebound. Capital leaving stablecoins is not trickling down to smaller tokens: it either stays in Bitcoin ETFs or exits the market altogether.

What to watch

The key technical level sits between $58,000 and $59,000 for Bitcoin. A clean break below that zone would bring a retest of $52,000 into play. On the flow side, the first credible signal of institutional re-engagement will be a sustained shift back to net positive inflows in the spot ETF complex.

On the macro front, oil prices and US short-term rates (2-year Treasuries) need to come down. The ether-to-bitcoin ratio remains the clearest gauge of whether risk appetite is returning within crypto.

The structural narratives (institutional adoption, MiCA regulation in Europe, asset tokenisation) remain intact. They simply are not the price-setting variable this week.