The cryptocurrency market is likely to remain under pressure in June as investors continue to assess slowing US economic growth and the outlook for monetary policy, though this weakness could present an opportunity for long-term investors to accumulate Bitcoin, says Merkle Capital.
According to the digital asset manager, risk assets have faced selling pressure since May as institutional investors reduced exposure amid growing concerns over the US economic outlook.
Bitcoin, the world's largest cryptocurrency, experienced significant volatility during the month, swinging more than 25% and testing the key support level of around US$61,000.
Although inflation concerns have eased somewhat following a decline in crude prices to less than $100 per barrel, uncertainty surrounding the US economy continues to weigh on investor sentiment and expectations for interest rate policy over the medium to long term.
Woramet Chansen, an investment advisor at Merkle, said while the cryptocurrency market could tumble in June, Bitcoin remains attractive for gradual accumulation due to several supportive factors.
"Financial markets have already priced in much of the uncertainty surrounding future US monetary policy," he said.
While inflation pressures have moderated, recent economic data suggest the US economy is slowing.
Investors are also monitoring labour market conditions, with expectations that non-farm payroll growth could decline significantly from previous levels.
These concerns have continued to pressure risk assets, including crypto. Market expectations for a potential shift towards higher interest rates in 2027 suggest that much of the macroeconomic risk has already been reflected in asset prices, Mr Woramet noted.
As a consequence, the market may have passed the period of maximum pressure from rate uncertainty, creating a more balanced risk-reward profile for Bitcoin, he said.
INSTITUTIONS LAY LOW
Institutional investors have been reducing risk exposure through spot Bitcoin exchange-traded funds (ETFs) amid macroeconomic uncertainty.
Merkle estimates spot Bitcoin ETFs recorded net outflows for 15 consecutive trading days, with selling exceeding $4 billion. The outflows pushed Bitcoin ETF balances to their lowest levels in several months, reflecting cautious sentiment among large investors.
However, a notable shift emerged on June 4, when spot Bitcoin ETFs recorded their first day of net inflows in 22 days as Bitcoin retested the $61,000 level.
"The return of institutional buying suggests that investor confidence in Bitcoin remains intact, particularly when prices approach levels considered attractive from a valuation perspective," noted Mr Woramet.
Merkle also highlighted on-chain valuation indicators as evidence that Bitcoin may be entering an attractive accumulation phase.
The firm's analysis showed Bitcoin's market value to realised value (MVRV) ratio is at 1.15, indicating that holders remain in profit by an average of 15%, with the network's average acquisition cost estimated at $53,800.
Historical data show during strong bull market cycles, Bitcoin's MVRV ratio has climbed above 3, implying significant upside potential if the broader uptrend remains intact.
"The combination of improving valuation metrics and the return of institutional inflows suggests Bitcoin is approaching a level where both short-term and long-term investors can begin accumulating positions," he said.
While macroeconomic uncertainty remains a risk, Merkle believes the current market correction is creating opportunities for investors seeking long-term exposure to Bitcoin, Mr Woramet said.
