Crypto Market Takes a Hit: What’s Behind the Sudden Downturn?
The cryptocurrency market is experiencing a significant downturn, with every top 100 coin in the red over the past 24 hours. The total market capitalization has dropped by 7.3% to $3.83 trillion, while the total trading volume sits at $163 billion. This sudden shift has left many investors wondering what’s driving the decline.
Crypto Winners & Losers
Among the top 10 coins by market capitalization, all have seen significant drops. Bitcoin (BTC) has fallen by 2.3% to $115,555, while Ethereum (ETH) has decreased by 4.8% to $3,673. Dogecoin (DOGE) has taken the biggest hit, plummeting by 7.5% to $0.2061. Solana (SOL) and Tron (TRX) have also seen substantial drops, with 6.5% and 3% declines, respectively.
Top 100 Coins See Double-Digit Decreases
Five coins in the top 100 have recorded double-digit decreases, with SPX6900 (SPX) leading the pack with a 16.3% drop to $1.64. Ethena (ENA), Jupiter (JUP), Pudgy Penguins (PENGU), and Bonk (BONK) have also seen significant declines. On-chain data firm CryptoQuant reports that Bitcoin has seen its third major profit-taking spike in this bull run, with realized profits spiking to $6-8 billion in late July.
Market Reaction to US Federal Reserve Decision
The cryptocurrency market is reacting to the US Federal Reserve’s decision to keep interest rates unchanged. Investors are keeping a close eye on inflation data and the ongoing trade deal saga in the US, which is contributing to the decline in prices. Douglas Colkitt, a contributor to Initial Fogo, notes that the dissenting voices at the Fed are a significant factor, indicating a serious internal debate about the sustainability of current policies.
Expert Insights
Mike Cahill, CEO of Douro Labs, believes that assets with asymmetric upside and low policy correlation, like Bitcoin, will play a more strategic role in the current macroeconomic environment. Nick Forster, founder of Derive.xyz, comments that the 30-day BTC volatility has decreased, suggesting the early stages of volatility compression. However, he notes that storm clouds are forming, with tariff negotiations and concerns about Fed independence looming over markets.
Levels & Events to Watch Next
As the market continues to fluctuate, key levels to watch include $113,000 for Bitcoin and $3,640 for Ethereum. The crypto fear and greed index has dropped into the neutral area, with a score of 57, indicating a slight fear creeping into the market. Should prices and sentiment drop further, it may open up buying opportunities.
US BTC and ETH ETFs See Significant Flows
The US BTC spot exchange-traded funds (ETFs) recorded outflows of $114.83 million, breaking a streak. In contrast, the US ETH ETFs saw inflows of $17 million, marking the 20th consecutive day of positive flows. BlackRock and Fidelity were among the top inflows, while Grayscale saw outflows of $6.8 million.
Quick FAQ
So, why did crypto move with stocks today? The answer lies in the US Federal Reserve’s decision to keep interest rates unchanged, which has led to a decline in both the crypto and stock markets. As for whether this dip is sustainable, it’s difficult to say. In the short term, prices may drop further, but the future outcome will depend on incoming economic signals.
