Bitcoin
Top reasons why BTC, ETH, XRP, SOL and DOGE prices retreat
The crypto market has been through a rough ride lately, with all major cryptocurrencies like Bitcoin, ETH, SOL, XRP, DOGE, SHIB and other falling in price over the past few days. However, the recent market crash indicates the continuation of the bearish sentiment hanging over the market while reducing investor confidence.
While there is a flurry of macroeconomic and other related concerns, let’s explore some of the possible reasons behind the drop in cryptocurrency prices today.
Why is the crypto market falling today?
The broader crypto market has seen tumultuous trading so far in recent weeks due to rising inflation concerns, the Fed’s stance with its policy rates, and other related concerns. Therefore, here we explore the possible reasons why the crypto market is witnessing a recessionary moment today.
Bitcoin ETF Outflows Trigger Crypto Market Crash
O cryptocurrency The market witnessed a slowdown today, driven by continued outflows from the US Spot Bitcoin ETF. According to data from Farside Investors, Bitcoin ETFs saw outflows for three days this week, contrasting with two days of inflows.
In the last two days, the US Spot Bitcoin ETFs recorded a significant outflow of 96 million dollars, increasing investor apprehensions. However, this comes after a promising start to the week with a substantial inflow of $217 million into the investment instrument, which also fueled optimism in the crypto market.
Meanwhile, the predominant factor behind the outflow pressure appears to be the persistent exodus of GBTC in grayscale, with more than $146 million leaving in just the last two days. These consecutive outflows from Bitcoin ETFs and the continued exodus from Grayscale have contributed to the prevailing negative sentiment in the crypto sector.
Inflation concerns
The current crypto market slump is attributed to rising inflation concerns following recent economic data. For context, the University of Michigan’s consumer sentiment index plummeted from 77.2 in April to 67.4 in May, marking a six-month low and missing expectations.
Furthermore, inflation expectations for next year increased to 3.5%, reaching a six-month high, while the five-year outlook increased to 3.1%. About that, Federal Reserve employees Cautious remarks further fueled investor anxiety.
As CoinGape Media previously reported, the Fed’s Lorie Logan highlighted significant risks of rising inflation, arguing for policy flexibility and ruling out immediate rate cuts. Simultaneously, Fed Governor Bowman emphasized the need for sustained political stability.
These developments left investors apprehensive about the economic outlook, triggering a slowdown in the crypto market as they sought clarity amid uncertain financial conditions.
Read too: Dogecoin (DOGE) Price Eyes ‘Golden Cross’, a Mega Rally Ahead?
Anticipation of next week’s economic data
Investors are gearing up for next week’s economic data release, causing a pause in the crypto market today. With recent gloomy economic indicators impacting sentiments, anticipation hovers over the US Producer Price Index (PPI) and core PPI data, which will be released on Tuesday, May 14, alongside the US President’s speech. Fed Chairman Jerome Powell.
After that, the focus shifts to the US Consumer Price Index (CPI) CPI data and core data, as well as US retail sales data, scheduled to be released on Wednesday, May 15. Notably, these crucial economic numbers carry significant weight for investors in the crypto market, offering insights into the current economic scenario and inflationary pressures.
However, as anticipation grows, market participants are exercising caution, leading to a temporary slowdown in the crypto market as they await crucial indicators to navigate future investment strategies.
A closer look at market trends
Recent discussions about the crypto market crash have been further intensified by the latest report from Santiment. In a recent X post, Santiment said that this downward trend coincided with a worrying lack of enthusiasm among traders to capitalize on the decline through the “buy the dip” strategy.
However, the report suggests that the prevailing sentiment among traders indicates a lack of confidence, signaling that the cryptocurrency’s price may be near a bottom. This hesitancy to buy during the dip reflects a broader sense of uncertainty among investors, contributing to downward pressure on prices across the market.
Source: Santiment, X
On the other hand, CoinGlass reported a significant increase in crypto settlements, with 58,000 traders facing liquidation totaling $156.53 million in the last 24 hours. Notably, the largest single liquidation occurred on Binance, involving the BTCUSDT pair, worth $3.56 million.
Pricing and Crypto Performance
The global crypto market is down 3.42% to $2.26 trillion at the time of writing, indicating the bearish sentiment lingering in the market. At the same time, the Bitcoin price fell 3.26% and traded at US$61,033.64, while the Ethereum Price fell 4.00% to $2,922.99.
Likewise, the Solana Price saw a drop of 5.65%, to US$145.72, while the XRP Price fell 2.31% to $0.5058. The scenario in meme coin The sector was also bearish amid the broader market pullback. The main meme currency, Dogecoin Price fell 5.15% to $0.1445, while the Shiba Inu Price decreased 3.80% to $0.00002262.
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