The cryptocurrency market today recorded a sharp drop in most major coins, with Bitcoin and Ethereum being the hardest hit.
The decline stems from impressive capital outflows from Bitcoin ETFs along with expectations for Fed Chairman Jerome Powell's speech, affecting the sentiment and investment strategies of traders.
MAIN CONTENT
Bitcoin dropped below $117,000, Ethereum lost 25.17%, dragging altcoins down.
The outflow of $130 million from Bitcoin ETFs after 12 consecutive days of inflow triggered the sell-off.
On-chain data shows that the market has not fallen into a state of panic, and investors still maintain long-term confidence.
Why has the cryptocurrency market dropped sharply today?
Official financial data shows significant volatility in leading coins, causing widespread selling pressure.
Bitcoin fell below $117,000, Ethereum lost nearly 25.17% to $3,650, while Solana and XRP also plummeted. This situation is directly related to an unexpected outflow of $130 million from Bitcoin ETFs, ending a 12-day streak of capital inflow. The previously good market condition led many investors to take profits, increasing selling pressure. Furthermore, the anticipation of Fed Chairman Jerome Powell's speech made investors more cautious and limited large trades.
Is the market overheating?
Blockchain analyst Axel Adler Jr. asserts that the market is still in a region of sustainable growth, not yet entering a high-risk area due to excessive speculation.
Mr. Adler assesses that Bitcoin is currently trading within a safe range from the Investor Average Price of $92,000 to the Hype Warning Threshold of $139,000. This indicates that investors mainly hold positions or buy cautiously, with no signs of panic selling or excessive speculation. According to the Advanced Sentiment Index data at 64%, market sentiment remains positive but not overly confident. If Bitcoin maintains above $92,000, long-term investors will continue to support a stable foundation for the market despite short-term volatility.
"Currently, we are not in the danger zone of excessive speculation, the market still has room to grow."
Axel Adler Jr, On-chain analyst, June 2024
What are the next factors to pay attention to?
Fed Chairman Jerome Powell's speech next Tuesday will provide clearer guidance on interest rate policy, thereby strongly affecting the volatility of the cryptocurrency market.
If the Fed maintains higher interest rates for an extended period, the pressure on investments in cryptocurrencies will increase, potentially continuing to push prices down. Conversely, signs of policy easing would stimulate new capital inflow. Current data and investor sentiment suggest that Bitcoin could gradually recover if there is no sudden overheating. The core support level will be an important anchor to prevent the market from falling into a crisis.
"Volatility is inevitable, but stability on-chain and positive sentiment remain a solid foundation for the next rally."
Cryptocurrency researcher Nguyen Van Hai, 2024
Frequently asked questions
Does the sharp decline in the cryptocurrency market mean the market is about to end its rally?
Data shows that this may just be a temporary adjustment, not the end, as Bitcoin still maintains important support levels and investor sentiment remains positive.
How does the Fed Chairman's speech affect cryptocurrency prices?
The speech could have a significant impact, especially regarding interest rate expectations, creating pressure or opportunities depending on the direction of monetary policy.
Why does the outflow of capital from Bitcoin ETFs cause strong market fluctuations?
Large capital outflows create a domino effect, increasing selling pressure and negatively impacting the price of Bitcoin and the overall cryptocurrency market.
What does the Advanced Sentiment Index reflect about the market?
This index measures investor sentiment, at 64% indicating controlled optimism, helping to forecast a more stable trend.
What important price levels should be monitored to assess Bitcoin's trend?
The level of $92,000 is considered a key support threshold to maintain market stability and avoid panic.
Source: https://tintucbitcoin.com/bitcoin-giam-xuong-117k-usd-thi-truong-lao-doc/
Thank you for reading this article!
Please Like, Comment, and Follow TinTucBitcoin to stay updated with the latest news about the cryptocurrency market and not miss any important information!
