Markets
$120 billion liquidated as BTC, ETH, XRP and Altcoins prices fall
The cryptocurrency market experienced a strong correction in the early morning in the United States, with Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) are all facing significant declines. The downtrend led to the liquidation of $120 billion, resulting in a 2.5% decline in overall market capitalization, now at $2.52 trillion.
BTC, ETH and XRP lead crypto market decline
Bitcoin price fell more than 3%, trading at $67,241. Likewise, Ethereum and Ripple followed suit, with XRP seeing a 1.73% decline to $0.5188. This widespread slowdown has affected the broader cryptocurrency market, leading to increased volatility.
On-chain metrics indicate a significant influx of cryptocurrencies to exchanges. This trend suggests that more investors are preparing to sell their holdings, a common precursor to market corrections. Increased supply on exchanges often causes prices to fall, exacerbating the current bearish sentiment.
The decline in engagement and activity further highlights the health of the crypto market. Metrics such as active addresses, transaction volumes, and network activity are all showing signs of decline. This reduced activity indicates a decrease in investor interest and engagement within the crypto ecosystem.
Regulatory News, Inflation Data Hits Crypto Market
Additionally, the Federal Open Market Committee’s publication (FOMC) The minutes contributed to the cautious approach of traders. Many Fed officials have expressed concerns about inflationary pressures, suggesting it could delay or reduce the number of rate cuts expected this year. This cautious stance has added to the negative sentiment in the crypto market.
Regulatory news has also contributed to the recent market downturn. The SEC has maintained a conservative stance on the crypto bill recently approved by the House of Representatives. President of the SEC Gary Gensler highlighted the agency’s willingness to engage in dialogue while continuing to enforce laws ensuring token operators provide necessary information to investors.
The decline in the crypto market can be attributed to the S&P Global Purchasing Managers’ Index (PMI index) report. The report said the U.S. economy grew at its fastest pace in two years. This robust economic growth has led traders to change their expectations for lower interest rates, putting additional pressure on Bitcoin and other digital currencies.
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