Whales Drag Bitcoin 2.8% Lower After Nearing $66,400

Bitcoin bulls’ hopes have been dashed once again as liquidity grabs erase the latest BTC price recovery. Bitcoin/USD was hitting $66,455 before the Wall Street open, but a slow grind beyond $66,000 evaporated before an abrupt about turn sent the pair a full $2,000 lower.

Observers put the blame firmly at the whales’ door, with both long and short BTC positions feeling the heat due to the day’s volatility. The latest United States macroeconomic data provided mixed signals on progress versus inflation, with jobless claims for the week through June 15 coming out at 238,000 versus the expected 235,000, down 5,000 from the week prior.

Crypto markets continue to exhibit sensitivity to employment data prints in 2024, with job openings at COVID and GFC lows indicative of business and liquidity cycle lows, not highs.

Bitcoin’s 10% sell-off since June 7 signals a warning for the broader stock market, according to Stifel strategist Barry Bannister. Bannister highlighted the strong correlation between bitcoin and the Nasdaq 100 since 2020, as the cryptocurrency shares characteristics as a speculative risk-on asset more than it behaves like “digital gold.”

However, while bitcoin has traded lower in June to around the $65,000 level, the broader stock market continues to hit new record highs driven by gains in mega-cap tech stocks like Nvidia and Apple.

The weakening of bitcoin signals an imminent S&P 500 summer correction and consolidation phase, with the Federal Reserve potentially keeping interest rates higher for longer to combat still-elevated inflation. In a summer correction scenario, Bannister sees high-flying Big Tech stocks like Nvidia getting hit the hardest as analysts’ forward earnings estimates show signs of peaking.

The S&P 500 could well rise to approximately 6,000 at year-end 2024 and then round trip to near where 2024 began five quarters later, by approximately 1Q26 (S&P 500 ~4,800).