Bitcoin
Bitcoin and Ether in free fall!
1:30 pm ▪ 4 min reading ▪ by Luc José A.
A new storm shakes the cryptocurrency market! Known for its volatility, the crypto market once again surprised investors with a significant drop. Major assets like Bitcoin and Ethereum have been particularly affected, but this is just the tip of the iceberg. What really happened and what are the reasons behind this descent into hell?
Cryptocurrencies in free fall since the early hours of Tuesday
This Tuesday morning was particularly difficult for the cryptocurrency marketwho suffered a brutal correction, causing significant losses for major digital assets. Bitcoin (BTC), the largest cryptocurrency by market capitalization, saw its price fall below the $66,000 mark, erasing gains from previous trading sessions.
Similarly, Ethereum (ETH), the second-largest cryptocurrency by market cap, fell to $3,400, wiping out the progress made in the previous week. Altcoins were also not spared from this wave of sales. Dogecoin (DOGE) and Solana (SOL) recorded drops of almost 9% in 24 hours, illustrating the high volatility that characterizes this market.
The numbers are equally alarming for other cryptocurrencies. Binance’s TON and BNB also felt the impact of this drop, although BNB held up better with a limited drop of 1.5%. At the same time, a significant reduction in Bitcoin positions held by US-listed asset managers was observed. In total, nine asset managers reduced their holdings by 3,169 BTC, approximately $208 million. Prestigious names such as Fidelity and Grayscale were named among notable sellers. These two managers respectively reduced their positions by 1,224 BTC and 936 BTC.
Why is the crypto market collapsing?
Several factors contributed to this sharp decline in the crypto market. Investors’ profit-taking is one of the main causes of this decline, as they seek to secure their gains after a period of growth. Furthermore, net outflows from Bitcoin ETFs in the United States have added downward pressure on the market. Another critical factor was the strengthening of the US dollar, triggered by political uncertainty following French President Emmanuel Macron’s surprise decision to call early elections. This situation led traders to turn to the dollar, thus weakening the price of Bitcoin, which traditionally has an inverse correlation with the US currency.
Recent speeches by US Federal Reserve (FED) officials have also weighed on the crypto market. FED Chairman Jerome Powell struck a stricter tone, signaling limited interest rate hikes for 2024, which dampened investor enthusiasm for risky assets like cryptocurrencies. Simultaneously, massive liquidations were observed, with $245 million in positions liquidated in 12 hours, including $225 million in long positions, increasing selling pressure.
This price drop has several implications for the crypto market. On the one hand, it reflects the market’s greater sensitivity to macroeconomic factors and institutional capital movements. On the other hand, some analysts see this correction as a buying opportunity, especially for altcoins which are testing key support levels. The current trend shows that the crypto market may continue to fluctuate based on global economic developments and monetary policies. Investors should remain cautious and monitor for signs of recovery or further declines.
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Lucas José A.
Graduated in Science from Toulouse and holder of a blockchain certification consultant delivered by Alyra, I am back on the Cointribune adventure in 2019. Harness the potential of blockchain to transform various sectors of the economy, and gain price engagement to raise awareness and inform the big public about this constantly evolving ecosystem. My goal is to enable you to better understand blockchain and take advantage of the opportunities it offers. I strive now to provide an objective to analyze current affairs, to decrypt market trends, to convey the latest technological innovations, and to measure in perspective the economic and social outcomes of this revolution in March.
DISCLAIMER
The views, thoughts and opinions expressed in this article belong solely to the author and should not be considered investment advice. Do your own research before making any investment decisions.