The cryptocurrency market has shown significant declines over the past 24 hours, reflected in the price of Bitcoin and altcoins. Overall capitalization has dropped by 4.46%.
Bitcoin Under Pressure
Bitcoin has dipped below $110,000 after reaching a recent peak of around $123,000. According to experts, this decline is part of a natural market cycle rather than a breakdown of the bullish trend. The leading cryptocurrency continues to trade significantly above its 200-day moving average, often considered a key support level in long-term bullish markets.
Market volatility has largely been driven by whale activity. Significant sell-offs by large holders have triggered fear and retail sell-offs.
Altcoins Struggle to Keep Pace
Ethereum dropped to $4,396, representing a loss of over 7 percent in the last 24 hours. XRP fell to $2.89 with nearly a 5 percent decline. Binance Coin and Solana also experienced losses, priced at $846 and $187 respectively. Dogecoin retreated to $0.21, and Cardano dropped by more than 8 percent to $0.83.
Despite the downturn, institutional interest remains. ETHZilla Corp announced the purchase of 7,562 Ethereum at an average price of $4,531, expanding its total holdings to over 102,000 ETH valued at $470 million.
Macro Liquidity and Correlation Debate
One concern in the market has been Bitcoin's deviation from global M2 liquidity growth, a metric it usually tracks closely. While the gap has widened, macro strategist Raoul Pal stated that such divergences are not unusual. Historically, Bitcoin has always caught up with global liquidity cycles.
The U.S. Dollar Index is also showing weakness, which typically benefits cryptocurrencies and other risk assets. Meanwhile, traditional markets like the S&P 500 and NASDAQ are cooling after their rally, adding to the sense of consolidation across asset classes.
The current situation in the crypto market, marked by the decline of Bitcoin and altcoins, highlights the importance of monitoring financial cycles and the actions of major players. A potential approach to oversold levels could trigger the next phase of growth.
