The cryptocurrency market is witnessing a significant price drop, especially for the three largest digital assets: Bitcoin, Ethereum, and XRP. After record price increases last week, these cryptocurrencies have experienced notable declines, with Ethereum down 5.2%, XRP down 3.8%, and Solana down 6%. Even the meme coin Dogecoin did not escape the downward trend, losing 5.2% of its value.
The Cryptocurrency Market Faces a New Downturn
According to a recent report from Barron's, the recent downturn may be due to a combination of several macroeconomic factors that have dampened investor optimism. Wholesale price data has also raised concerns about the possibility of prolonged high interest rates, while Treasury Secretary Scott Bessent confirmed that the U.S. government has no plans to expand its Bitcoin reserves.
Antonio Di Giacomo, an analyst at XS, emphasized the impact of macroeconomic indicators on cryptocurrency prices. He pointed out that Bitcoin's pullback after reaching an all-time high indicates that volatility can accompany such rapid price changes, even as institutional adoption of cryptocurrencies continues to increase.
The analyst believes that the current digital asset market seems to be balancing between optimism and caution, navigating both structural demand and speculative risks.
Looking ahead, market analysts are closely monitoring the upcoming statements of Federal Reserve (Fed) Chairman Jerome Powell at the Jackson Hole Symposium.
Any signs of a hawkish stance or delays in rate cut expectations could put pressure on risk assets, including cryptocurrencies. Conversely, dovish signals could help sustain the current growth momentum in the market.
The Challenges of Bitcoin in September
In a recent post on social media X (formerly Twitter), market expert Doctor Profit shared insights on Bitcoin's next price trajectory. He predicts that prices will move sideways within a narrow range of about 8% until September.
Although the medium-term outlook remains optimistic, he predicts that there will be a significant correction in September, warning that this could be a challenging month for the cryptocurrency market.
Despite the current pullback, on-chain data shows that large wallets continue to accumulate, suggesting that large investors remain optimistic about the long-term potential of cryptocurrencies.
This expert also emphasized that the funding rate also appears healthy, indicating that the market does not face immediate selling pressure despite recent declines in Bitcoin and Ethereum prices leading to the current downturn.
As of the time of writing, Bitcoin is trading at $115,630, down 6.5% from the recent record of $124,000. On the other hand, Ethereum is gradually approaching its all-time high with the decline stopping at a support level of $4,300.
