Reasons for Cryptos Decline Today Bitcoins Decrease Caused by Profit Taking ETF Outflows and a Strengthened Dollar
In the latest cryptocurrency news, Bitcoin and Ethereum have taken a hit with Bitcoin dropping below $66,000 and Ethereum falling to $3,400. Other altcoins like Dogecoin and Solana also suffered losses of up to 9% in the last 24 hours.
The market downturn can be attributed to several factors, including profit-taking, outflows from U.S.-listed Bitcoin ETFs, and a stronger U.S. dollar. Notably, nine ETFs collectively decreased their Bitcoin holdings by 3,169 BTC (approximately $208 million) with Fidelity and Grayscale being notable sellers.
Despite the market decline, some analysts see opportunities in the altcoin market, particularly with the Others.D index approaching a crucial support trendline. This could signal a potential reversal in the current downtrend.
The recent cryptocurrency market experienced a significant downturn, led by major cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH). Bitcoin fell below $66,000, reversing previous gains, while Ethereum dropped to $3,400, erasing last week’s progress.
The market-wide sell-off was driven by a mix of factors, including profit-taking and net outflows from U.S.-listed Bitcoin exchange-traded funds (ETFs).
Altcoins were heavily impacted during the market slump, with notable losses in tokens such as Dogecoin (DOGE) and Solana’s SOL, which lost as much as 9% in the past 24 hours.
Other tokens like Ton Network’s TON and BNB Chain’s BNB also saw losses, with BNB outperforming with a 1.5% decline.
Several factors have contributed to the current market downturn. Political uncertainty triggered by Emmanuel Macron’s surprise decision to call a snap election in France has strengthened the U.S. dollar as traders exited the euro. A strong dollar tends to put downward pressure on Bitcoin prices.
Neil Roarty, an analyst at investment platform Stocklytics, pointed to the need for lower interest rates and a weaker dollar to push BTC closer to the $70,000 mark.
FxPro senior market analyst Alex Kuptsikevich warned of generally bearish sentiment and cautioned that increased liquidity on weekdays might lead to increased selling interest.
The recent market slump saw Bitcoin dropping to new one-month lows of $64,000, with a push past $67,000 failing to sustain. Analysts are closely watching the short-term holder realized price (STH-RP), currently at $63,700, to gauge market sentiment.
The substantial reduction in Bitcoin holdings by major ETFs has likely contributed to the current downturn. Nine ETFs collectively decreased their Bitcoin holdings by 3,169 BTC, equivalent to approximately $208 million. Fidelity and Grayscale were among the notable sellers.
The altcoin market has also been hit hard by the recent downturn, with mid-cap and low-cap coins plummeting back to their previous bear market lows.
However, some analysts see opportunities amidst the chaos. Anup Dhungana noted that the Others.D index, which tracks the performance of altcoins excluding the top 10, is on the verge of retesting a crucial support trendline that marked the bull cycle bottom for altcoins. A successful retest could potentially signal a reversal in the current downtrend.
While the current conditions may seem grim, experienced investors view this downturn as an opportunity to accumulate promising assets at discounted prices, while remaining cautious of further downside risk.
