Markets
$120 billion liquidated as BTC, ETH, XRP and Altcoin prices collapse
The cryptocurrency market underwent a sharp correction in the early hours of the United States Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) are all facing significant declines. The bearish trend led to the liquidation of $120 billion, resulting in a 2.5% drop in the overall market capitalization, now at $2.52 trillion.
BTC, ETH and XRP lead the decline of the cryptocurrency market
The price of Bitcoin fell by more than 3%, trading at $67,241. Likewise, Ethereum and Ripple followed suit, with XRP seeing a decline of 1.73% to $0.5188. This widespread recession has affected the broader cryptocurrency market, leading to increased volatility.
On-chain metrics indicate a significant influx of cryptocurrencies into exchanges. This trend suggests that more investors are preparing to sell their holdings, a common precursor to market corrections. Increased supply on exchanges often results in lower prices, exacerbating the current bearish sentiment.
The decline in engagement and activity further highlights the health of the cryptocurrency market. Metrics such as active addresses, transaction volumes and network activity all show signs of decline. This reduced activity indicates a decline in investor interest and engagement within the crypto ecosystem.
Regulatory News and Inflation Data Hit the Cryptocurrency Market
Furthermore, the statement from the Federal Open Market Committee (FOMC) The minutes contributed to the cautious approach of the operators. Many Fed officials have expressed concern about inflationary pressures, suggesting this could delay or reduce the number of rate cuts expected this year. This cautious stance has added to the negative sentiment in the cryptocurrency market.
Regulatory news has also contributed to the recent market downturn. The SEC has maintained a conservative stance regarding the cryptocurrency bill recently passed by the House of Representatives. Chairman of the SEC Gary Gensler underlined the agency’s willingness to engage in dialogue while continuing to enforce laws that ensure token operators provide necessary information to investors.
The cryptocurrency market’s retreat can be attributed to the S&P Global Purchasing Managers’ Index (SMEs) relationship. The report indicates that the US economy grew at the fastest pace in two years. This robust economic growth has led traders to shift their expectations for interest rate cuts, putting further pressure on Bitcoin and other digital currencies.
Read also: Bitcoin Whales Accumulate 20,000 BTC, Fueling $70,000 BTC Rally