Markets
Bitcoin Price Drops Below $56,000; Ether, Solana, Other Cryptocurrencies Drop Up to 15%
Bitcoin’s price fell on Friday, falling for the fourth consecutive trading session, weighed down by the broader cryptocurrency sell-off.
Bitcoin price is at $55,510, down 5.82% in the last 24 hours, with the token’s market cap at $1.11 trillion. So far this year, Bitcoin’s price is up 35.39%.
Among other digital assets, prices of smaller coins like Ethereum fell 8.4% to $2,954.16, Solana dropped 9.55% to $123.08, and XRP dropped 12.48% to $0.400.
Bitcoin’s price hit an all-time high of $73,798 in March, driven by strong demand for U.S. Bitcoin exchange-traded funds. However, token ETF inflows have slowed since then, weighing on Bitcoin prices. Additionally, approvals for U.S. debut ETFs for the second-largest token Ether are pending.
Cryptocurrency prices were pressured by falling demand for US Bitcoin exchange-traded funds. Political developments in the US and signs that governments are disposing of seized tokens also weighed on Bitcoin prices.
“Bitcoin (BTC) has seen a wave of liquidations totaling $121.29 million as long positions were forced to close amid mounting losses. Over the past month, Bitcoin has fallen by 15%, reflecting heightened market volatility and bearish sentiment. There could be further resistance to reach the $60K levels as bears dominate the market due to liquidations, whale movements, miner liquidations, etc. The liquidation of assets by the German government is adding to BTC’s volatility,” said Rajagopal Menon, VP, WazirX.
According to a report from Bloomberg, administrators of bankrupt exchange Mt. Gox are returning a stash of Bitcoin to creditors in stages. Speculators are unsure how much of the $8 billion loot will end up being sold. A wallet linked to Mt. Gox moved $2.7 billion of the token on Friday, according to Arkham Intelligence.
On the other hand, global stock markets have rallied, with MSCI Inc.’s global equity index hovering near a record high. A short-term, 30-day correlation between Bitcoin and the index is plunging.
Investors are awaiting U.S. nonfarm payrolls data to be released later today for insight into potential rate cuts from the U.S. Federal Reserve. Weak U.S. economic data has bolstered the case for a Fed rate cut in the coming months.
“The US Federal Reserve Chairman has hinted at larger-than-expected rate cuts, but there is no timeline for when this will happen. This scenario is seen as bullish for Bitcoin and major altcoins. Additionally, the easing of miner liquidations could ease pressure on the market in the coming weeks,” Menon said.
(With contributions from Bloomberg)
Disclaimer: The views and recommendations made above are those of individual analysts or brokerage firms, and not of Mint. We advise investors to consult certified experts before making any investment decisions.
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