The cryptocurrency market has sharply declined over the past 24 hours, with global capitalization dropping by 3.49% to $4.03 trillion.
Bitcoin still holds above the important support level despite falling nearly 4%, while altcoins decline in tandem and the market is awaiting decisions from the Fed at the end of August.
MAIN CONTENT
Bitcoin dropped 3.72% but remains above the $118,000 threshold.
Dominant altcoins also fell, with DOGE and XRP losing over 6%.
The main reason is due to higher than expected US inflation data, reducing expectations for a Fed rate cut.
How has the cryptocurrency market fluctuated in the past 24 hours?
The total market capitalization of cryptocurrencies has decreased by 3.49%, now around $4.03 trillion.
After a week of strong price increases with Bitcoin reaching a new peak above $124,000, the market shows signs of correction. Bitcoin fell 3.72%, trading around $118,895, still maintaining an important support area. Ethereum (ETH) lost 2.57%, dropping to about $4,635, giving back part of the 19% increase from last week. Other altcoins like Solana (SOL) fell deeper by 4.55%, while Cardano (ADA) also dropped by 3.27%.
Why did Bitcoin decline but still maintain an important support level?
Bitcoin's decline is a natural reaction after a period of overheating, a correction to regain technical balance.
Maintaining the price around $118,895 indicates sustainability from long-term coin-holding investors. This is a strong support area that Bitcoin has tested multiple times before, helping to protect against a deeper decline and maintain its leading position in the cryptocurrency market.
How much value have Ethereum and Altcoins lost?
Ethereum fell by 2.57%, bringing the price back to $4,635, 19% lower than last week's peak.
Solana fell over 4.5% after a strong previous increase, while Cardano has not been able to surpass the $1 mark, fluctuating around $0.9288. This is a sign that major altcoins are still under correction pressure as the overall market declines.
What is the situation of other prominent coins?
Dogecoin experienced the largest drop among the top 10, losing up to 8.72%, down to $0.2273.
XRP also fell over 6%, down to $3.10, erasing most of the price gains from the past week. These fluctuations indicate the sensitivity of MEME coins and altcoins to macroeconomic changes.
What caused the sudden weakness in the cryptocurrency market?
Core US inflation data for July rose by 0.9%, exceeding market expectations and reducing the likelihood of the Fed cutting rates in September.
This information triggered a 'risk-off' reaction in the financial market, leading to a wave of sell-offs in stocks and cryptocurrencies. Investors are awaiting the FOMC meeting on August 22 for new guidance from the Fed before the September policy decision.
The global financial market is reacting to new inflation data, making investment sentiment more cautious and pushing risky assets into a correction state.
Market capital analyst, August 2024
Frequently Asked Questions
Will Bitcoin continue to decline further?
Bitcoin maintains the important support level around $118,000, with a possibility of a slight correction, but a deep decline may not happen immediately.
Why did Ethereum and other altcoins decline more sharply than Bitcoin?
Altcoins generally have lower liquidity and often react strongly when the overall market fluctuates; Ethereum is also affected by the overall trend.
How does inflation data affect cryptocurrencies?
High inflation reduces expectations for a Fed rate cut, causing investors to shift to safe assets, leading to a sell-off of cryptocurrencies.
When might the cryptocurrency market recover?
The market is waiting for clearer policy signals from the Fed, especially from the FOMC meeting at the end of August to determine a clearer trend.
Is the volatility of XRP and Dogecoin a bad sign?
This is the effect of correction after a hot rise, not necessarily signaling a long-term downward trend, more market signals need to be monitored.
Source: https://tintucbitcoin.com/xrp-bitcoin-ethereum-dong-loat-giam-2/
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