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US$ 120 billion liquidated with price drop of BTC, ETH, XRP and Altcoins
The cryptocurrency market experienced a sharp correction in the early hours in the US, with Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) all facing significant drops. The downtrend led to the liquidation of $120 billion, resulting in a 2.5% drop in the overall market capitalization, now at $2.52 trillion.
BTC, ETH and XRP lead crypto market decline
Bitcoin price fell more than 3% to trade at $67,241. Likewise, Ethereum and Curling followed suit, with XRP seeing a 1.73% decline to $0.5188. This widespread recession has affected the broader cryptocurrency market, leading to increased volatility.
On-chain metrics indicate a significant flow of cryptocurrencies on exchanges. This trend suggests that more investors are preparing to sell their holdings, a common precursor to market corrections. Increased supply on exchanges often results in lower prices, exacerbating the current bearish sentiment.
The decline in engagement and activity further highlights the health of the crypto market. Metrics such as active addresses, transaction volumes and network activity show signs of decline. This reduced activity indicates a decrease in investor interest and involvement in the crypto ecosystem.
The bearish sentiment coincides with the release of Inflation in the UK data. The UK’s annual inflation rate eased to 2.3% from 3.2% last month, but was higher than the 2.1% forecast. Despite failing to meet market expectations, sterling strengthened as UK inflation approached the Bank of England’s 2% target.
Regulatory News and Inflation Data Hit the Crypto Market
The US dollar index (DXY) suffered volatility following the UK inflation data, eventually falling. However, the US 10-year Treasury yield (US10Y) saw an unusual rise to 4.457%, increasing volatility in Bitcoin prices despite low trading volumes.
Additionally, yesterday’s statement from the Federal Open Market Committee (FOMC) The minutes contributed to the cautious approach of traders. Many Fed officials have expressed concerns about inflationary pressures, suggesting that this could delay or reduce the number of rate cuts expected this year. This cautious stance has increased negative sentiment in the crypto market.
Regulatory news has also contributed to the recent market downturn. O SEC maintained a conservative stance regarding the encryption bill recently approved by the Chamber of Deputies. SEC Chairman Gary Gensler emphasized the agency’s readiness for dialogue while continuing to enforce laws by ensuring that token operators provide necessary disclosures to investors.
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