The cryptocurrency market is falling today as traders react to rising geopolitical tensions in the Middle East and exchange-traded fund (ETF) outflows. Bitcoin fell to $66,400, while the market capitalization of all tokens fell by 2.35% over the last 24 hours, to $2.29 trillion.
Cryptocurrency Market Falls as Geopolitical Tensions Rise
Bitcoin and most altcoins are down, with Ethena, Dash, Uniswap, Sei, Morpho, Flare and Avalanche all plunging more than 6%.
The fall in the crypto market coincides with the performance of European and Asian stocks. Data shows that the Euro Stoxx 50 lost 1.92%, while the German DAX fell 1.80%.
Asian stocks also fell, with the Hang Seng Index down 0.80%. The Nikkei 225 and Kospi indices lost more than 1%. This is also happening in the Americas, where futures contracts linked to the Dow Jones and Nasdaq 100 remained in the red.
Crude oil prices continued to rise on Thursday, with Brent and West Texas Intermediate (WTI) surpassing $108 and $107, respectively.
This surge comes after President Donald Trump’s speech, in which he reiterated that the war would last longer. While Trump has suggested it will end within the next two weeks, analysts say it will continue longer than expected.
As a result, market participants have adopted an appetite for risk, with CNN Money’s Fear and Greed Index falling to 10.
The Crypto Fear and Greed Index also remains in the “fear” zone, with investors anticipating that inflation will remain high, pushing the Federal Reserve to maintain high interest rates.
Demand for Bitcoin and crypto ETFs has weakened
The crypto market is retreating as investor demand continues to weaken. Data compiled by SoSoValue shows spot Bitcoin ETFs saw outflows of more than $173 million on Wednesday. They experienced more than $296 million in outflows last week, bringing the cumulative total of net flows to more than $55 billion.
Ethereum ETF outflows reached $7.10 million on Wednesday after losing $46 million last month. These funds have recorded asset outflows for six consecutive months.Â
Similarly, spot XRP ETFs lost $1.2 million on Thursday after shedding $31 million in assets over the past 30 days. Other major altcoins like Solana, Polkadot, Litecoin and Dogecoin have not seen substantial inflows in recent months.
Crypto volume and futures open interest fell
The cryptocurrency market is falling due to continued weak demand in the spot and futures markets.
Data compiled by CoinGlass shows that futures open interest fell 4.4% over the past 30 days, to more than $103.7 billion. Bitcoin futures open interest fell to $46 billion, from a peak of $95 billion last year.
Open interest des futures crypto | Source : CoinGlass
Futures open interest on Ethereum rose to $28.3 billion from a peak of more than $60 billion last year. Other cryptocurrencies have seen lower futures open interest in recent months, a trend that accelerated after the massive liquidation episode in October.
Demand for the cryptocurrency market also continued to decline, standing at over $176 billion compared to a peak of over $352 billion last year.
