Crypto Market Correction: $120B Liquidated As BTC, ETH, XRP, Altcoins Price Tumble

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As a researcher with extensive experience in the cryptocurrency market, I believe that recent events have triggered a significant correction. The sharp decline of major cryptocurrencies like Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) indicates a bearish trend in the market. With a combined $120 billion in liquidations and a 2.5% drop in overall market capitalization, this downturn has led to increased volatility.

In the wee hours of the US day, the cryptocurrency market underwent a considerable downturn. Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) each suffered substantial losses. This bearish movement triggered the sell-off of approximately $120 billion, consequently causing a 2.5% decrease in the total cryptocurrency market value, now amounting to around $2.52 trillion.

BTC, ETH, and XRP Lead Crypto Market Decline

The price of Bitcoin dropped by more than 3%, reaching $67,241. Likewise, Ethereum and Ripple experienced declines, with XRP dipping by 1.73% to $0.5188. This widespread slump caused heightened volatility in the cryptocurrency market as a whole.

Recent data from the blockchain shows a noticeable uptick in cryptocurrencies being transferred to exchanges. This development could signal that many investors are readying themselves to offload their assets, a pattern frequently seen before market downturns. The subsequent surge in available supply on these platforms can lead to price declines, further intensifying the present pessimistic market mood.

The downturn in engagement and action in the crypto market is more evidence of its robustness, as indicators like active user addresses, trading volumes, and network activity have started to dwindle. This decrease in activity suggests that investor enthusiasm and participation within the crypto community are on the wane.

As a crypto investor, I’ve noticed that bearish sentiment often arises when significant economic data is released. In this case, it was the UK inflation figures that caused a stir. The annual inflation rate had eased to 2.3%, which was a decrease from the previous month’s 3.2%. However, it surpassed the anticipated 2.1% decrease. Surprisingly, despite not meeting market expectations, the Pound Sterling still gained strength as UK inflation moved closer to the Bank of England’s 2% target.

Regulatory News and Inflation Data Hit the Crypto Market

The US dollar index (DXY) underwent fluctuations in response to the UK inflation figures, eventually declining. Concurrently, the US 10-Year Treasury yield (US10Y) exhibited an unexpected surge to reach 4.457%, intensifying Bitcoin’s price instability despite limited trading activity.

Yesterday’s publication of the Federal Open Market Committee (FOMC) minutes caused traders to exercise caution. Several Fed officials voiced worries over potential inflation, which could result in fewer or delayed interest rate reductions in 2023. Consequently, this hesitant stance from the Fed added to the pessimistic mood in the cryptocurrency market.

Recent regulatory developments have played a role in the market’s recent decline. The Securities and Exchange Commission (SEC) has taken a cautious approach regarding the crypto bill passed by the House of Representatives. SEC Chair Gary Gensler has stressed the importance of dialogue while enforcing laws requiring token issuers to disclose essential information to investors.

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2024-05-23 23:40