The crypto market has taken a significant hit, with Bitcoin and several major altcoins experiencing sharp declines. Bitcoin, after reaching a new all-time high of nearly $74,000 last Thursday, has seen its price drop by about $10,000. The downturn has affected the entire crypto landscape, with the total market capitalization falling below $2.5 trillion, a stark contrast to the over $2.9 trillion observed last week.
The rest of the crypto market has not been spared, with Ethereum, Solana, Binance Coin, Dogecoin, Polkadot, Polygon, and NEAR all reporting losses of over 10% in a single day. This downturn has led to Bitcoin’s market dominance increasing slightly, despite its own losses, indicating that altcoins have been hit even harder.
The market’s decline coincides with the largest single-day outflow ever recorded from Bitcoin exchange-traded funds (ETFs), signaling a slowdown in capital inflows. This comes ahead of a crucial Federal Open Market Committee meeting, which could influence the market’s direction depending on the Fed’s monetary policy decisions.
Analysts have pointed to several reasons for the downturn, including overvaluation concerns after a rapid price increase and a series of long position liquidations in the derivatives market, which have added downward pressure on prices. Additionally, the anticipation of a pre-halving retrace, a pattern observed in previous cycles, has contributed to the bearish sentiment.
Despite the current market conditions, some remain optimistic about Bitcoin’s long-term prospects, especially as more financial institutions begin to embrace it. However, the market’s immediate future seems uncertain, with key support levels being closely watched by traders and analysts alike.
In other news, the Japanese Government Pension Investment Fund is exploring Bitcoin as a potential diversification tool, and MetaMask has partnered with CoinLedger to simplify tax reporting for its users. Meanwhile, the SEC has faced sanctions over misconduct in a recent case, highlighting ongoing regulatory challenges in the crypto space.
