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The cryptocurrency market is currently reeling from significant losses, marking its second-worst weekly decrease in 2024.
Amid a backdrop of dwindling demand for Bitcoin exchange-traded funds (ETFs), uncertainty surrounding the U.S. Federal Reserve’s monetary policy, and a general decline in appetite for digital assets, Bitcoin has suffered one of its sharpest declines in months.
Bitcoin’s value plummeted by nearly 5% to fall below $61,000, which is under its one-month low. This downturn was exacerbated by a six-day streak of withdrawals from U.S. ETFs focused on cryptocurrency, making it a tough week for the market leader.
In just the last 24 hours, the fallout has been brutal: 90,987 traders were liquidated, resulting in total losses amounting to a staggering $283.23 million. This mass liquidation underscores the volatility and unpredictability inherent in the cryptocurrency market.
Further compounding the market’s woes is the broader economic context, particularly concerns over the Federal Reserve’s reluctance to cut interest rates swiftly after they reached a two-decade high.
Ether and Solana have not been spared, suffering their longest weekly drops since last year and 2022, respectively. As a result, the global crypto market valuation has shrunk by 4.54% in a single day, now standing at $2.24 trillion.
Particularly hard-hit is Ethereum, which has seen its value decrease by about 5% from the previous day and 8% from last week, now priced at $3,312 despite recent upticks in long-term holder investments during the price dip. Interestingly, while Bitcoin ETFs are seeing withdrawals, fund managers are gearing up to launch the first U.S. ETFs that will directly invest in Ether.
Solana, on the other hand, seems to be finding some favor among hedge funds that specialize in digital assets, despite the market downturn. However, these strategic shifts come too late for many traders who have already felt the brunt of the market’s decline.
Adding to the uncertainty, the altcoin market, including major cryptocurrencies like Polkadot, Solana, and Ripple, reported daily decreases ranging from 5% to 12%. Even meme coins like Shiba Inu are feeling the heat, with a drop of about 9% in the last 24 hours and nearly 20% in the past week.
Moreover, a slowdown in Bitcoin whale transactions (transactions worth more than $100,000) just before the price dropped below $61K further highlights the cautious stance of major investors.
Data shows a 42% decline in such transactions in the days leading up to the fall, signaling a shift in investor sentiment from bullish to cautious as earlier optimism about a dovish Federal Reserve and a regulatory-friendly political climate in Washington begins to wane.
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