Bitcoins And Altcoins Experience Declines: Is The Crypto Market Failing?

ByMehar Mozan

Jul 8, 2024

The cryptocurrency market has declined over 11% in the last 48 hours, causing a loss of $250 billion in market capitalization. In the past 24 hours, the market cap has declined over 8%, indicating bear market conditions. Bitcoin’s price stands at $53,485. This is under significant support levels and is risking a further downturn to $52,000.

Meanwhile, Altcoins, including BNB, Toncoin, XRP, Cardano, and Ethereum, traded on Quantum Income PRO, declined over 15%. Meme coins along with some AI coins and Solana ecosystem tokens have also suffered losses in double-digits in 24 hours.

Investors have become fearful and are taking to preemptive selling instead of the upcoming $10 billion MT.Gox repayment in Bitcoin (BTC) and Bitcoin Cash (BCH) this week. 

Bear Market Conditions

According to Coinglass, $680 million in cryptocurrencies were liquidated the day before by 232,000 traders. There, ETHUSDT liquidation is highest with 18.48 million dollars. In total $90 million in short positions and $590 million in long positions were liquidated which resulted in a drop from a market cap going to 2.24 trillion USD  to under 1.99 trillion USD.

Moreover, more than 17,500 BTC options worth $1.02 billion will expire soon, with the put-call ratio being 0.67. The maximum pain point stems from $61,500, indicative of persistent selloff pressure as Bitcoin retains a position below $54,000. The put-call ratio recently rose to 1.09, with a put volume of over 17,200 and a call volume of around 15,793. This reflects rising bearish sentiment among people trading in options.

Implied volatility or IV reports decline, suggesting a potential market recovery during uncertain price movements that could drop Bitcoin’s price below $52,000.

Bitcoin Selloffs From The Government

Data reveals that the US and German governments have substantially moved Bitcoin. The first couple was moved 237 BTC from the Potapenko/Turogin case in another wallet. Its assets include a total of 1,700 BTCs worth $98.76m transferred to an unknown wallet and another batch for sale on Coinbase, Kraken, and Bitstamp which amounts to up to 1300BTC. Consequently, this has resulted in more fear among investors and the price of Bitcoin once dropped below $54,000 again.

The Impact Of Macroeconomic Factors

Jerome Powell, the Head of the Federal Reserve, recently gave a speech that indicated a hawkish stance this year. The same was confirmed in FOMC minutes. The election pressures have also boosted market pressures. Fed officials are currently waiting for additional labor market and US inflation data.

As of now, the CMW FedWatch tool depicts a 66.5% probability of a 25-basis point decline in September, up from 59% the previous week. Weak data on the US economy has given rise to expectations of Fed interest rate cuts this year. The U.S. dollar index (DXY) hit a three-week low before stabilizing near 105 on Friday A slowing in the labor market is suggested by 4.35% on the day after prime fixed income was hit hard following back-to-back weaker than expected Jobs and ISM data (the10-year treasury yield).

A potential market turnaround has been signified by the analysts as they believe that making short positions on Altcoins and Bitcoins with an AI trader bot would be a mistake. They expect a rebound of over $58,000 before the weekends, with consolidation around current levels. An analyst stated that a fall in USDT liquidity will not encourage BTC growth. Conversely, growth will lead to the demand for added coins.

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