The euphoria from recent all-time highs on the crypto market is fading fast. Sentiment has deteriorated sharply in just a few days, with traders once again focusing on macroeconomic headwinds and the risks tied to high leverage.

Bitcoin Slips Below Key Levels

Bitcoin dropped to $113,500, a daily decline of more than 1.5%. Analysts warn that falling below the 50-day moving average has heightened fears of a deeper correction.

“Bitcoin has returned to levels from early August, moving below its mid-term trend line. If pressure increases, we could see a slide toward $100,000 near the 200-day moving average,” said Alex Kuptsikevich, chief market analyst at FxPro.

The total cryptocurrency market cap fell another 0.4% to $3.87 trillion, with analysts speculating on a potential move down to $3.6 trillion.

Ethereum Holds Institutional Interest Despite Decline

Ethereum slipped 1.8% to $4,159, more than 12% below its recent peak. Key support remains at $4,100, a level ETH is once again testing.

“Ethereum is mirroring Bitcoin’s pullback as traders lock in profits after strong recent gains. However, robust ETF inflows and rising allocations from institutional investors keep the mid-term outlook constructive,” noted Joel Kruger, strategist at LMAX Group.

Institutional flows into ETH remain strong despite spot market volatility, suggesting long-term conviction is intact.

Altcoins in the Red

🔹 Dogecoin lost 4.1%, trading at $0.289.

🔹 Cardano (ADA) fell 6.6%, leading losses among major altcoins.

Altcoins are proving particularly vulnerable as sentiment deteriorates and traders unwind riskier positions.

Derivatives Market Risks

Rising open interest in crypto futures highlights the extent of leverage accumulating in the market.

“Leverage is a double-edged sword—it can accelerate gains, but it also magnifies losses. BTC and ETH are highly vulnerable to sharp swings whenever sentiment shifts,” explained Ryan Lee, chief analyst at Bitget.

The buildup of leveraged long positions has made the market more fragile, raising the risk of sudden moves in either direction.

Macro Focus: Fed Takes the Stage

The crypto market is also reacting to broader macroeconomic pressures. Higher-than-expected U.S. inflation has dampened hopes of a quick Fed rate cut and fueled profit-taking.

Attention now turns to the annual Jackson Hole symposium, where Fed Chair Jerome Powell is expected to outline monetary policy for the fall. His remarks could ripple across equities, currencies, and digital assets alike.

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