Markets
Why is the cryptocurrency market down today?
During the first European session, the cryptocurrency market capitalization slipped about 4 percent over the past 24 hours, settling at $2.42 trillion on Thursday. Bitcoin (BTC) and Ethereum prices led the entire altcoin into a correction, which triggered a notable liquidation.
The latest market data shows that The price of Ethereum slipped about 8 percent to settle at around $3,174. The price of Bitcoin continued with the recent correction to retest the 50-day moving average (MA) around $64,000.
As a result, nearly $300 million was liquidated from the crypto derivatives market, mostly involving long traders.
The Main Reasons Behind Today’s Cryptocurrency Slide
Ethereum ETF Outflows and Market Pessimism
US-based spot Ethereum ETFs saw net cash flow outflow of approximately 133 million dollarsled by Grayscale’s ETHE, which has nearly $8 billion more to shed. The poor first two-day performance of Soot’s Ether ETF has added to the pessimism in the cryptocurrency market.
Stock Market Troubles Impact Global Sentiment
The US stock market has seen a staggering loss of around $1.1 trillion in valuation in the last 24 hours, nearly equivalent to the entire market cap of Bitcoin. This significant liquidation in the stock market has reverberated across global financial markets, despite a traditionally low correlation with the cryptocurrency sector.
FOMC uncertainty
The upcoming statement from the Federal Open Market Committee (FOMC) adds another layer of uncertainty, contributing to medium-term market volatility.
Mt.Gox FUD
Additionally, Bitcoin’s Fear and Greed Index has fallen to 68%, signaling growing fear of a potential cryptocurrency capitulation. This apprehension has been fueled in part by Mt. Gox’s repayments to creditors, with over $2 billion deposited on the Bitstamp exchange in the last 24 hours.
Read also: Peter Schiff Warns of Crypto Market Crash: FED Action Under Scrutiny
The cryptocurrency market is in turmoil. Are we headed for a crash or is this just a temporary setback?