The cryptocurrency market has witnessed a sharp decline as total capitalization drops to 3.78 trillion USD, with many altcoins struggling to maintain their upward momentum.
The major index has fallen sharply, putting pressure on Bitcoin, while liquidity activities have surged, reflecting substantial sell-offs across exchanges. The context of global liquidity and the correlation with the financial market continues to be a topic of debate.
MAIN CONTENT
The total cryptocurrency market capitalization has decreased by 4.46%, down to 3.78 trillion USD.
Bitcoin is under strong pressure but remains above the long-term 200-day support.
Altcoins have fallen sharply; however, large organizations still show confidence by accumulating Ethereum.
How is Bitcoin experiencing such significant pressure?
Bitcoin has dropped below 110,000 USD, marking a significant decline after peaking near 123,000 USD. This is seen as a development in the natural market cycle, not a break in the long-term uptrend.
The technical chart also shows that Bitcoin is still trading above the 200-day moving average — an important support area in long-term bull runs. The volatility is largely influenced by cryptocurrency whales selling off, creating a spillover pressure causing retail investors to sell as well.
As Bitcoin enters the overbought region at high prices, a correction is inevitable. Currently, as it approaches the oversold region, investors are waiting for the next recovery signal.
What are the current difficulties of altcoins in the market?
Most major altcoins have recorded significant declines over the past 24 hours. Ethereum lost more than 7% of its value, dropping to 4,396 USD. XRP fell nearly 5% to 2.89 USD, while Binance Coin and Solana dropped to 846 USD and 187 USD, respectively. Cardano also fell more than 8% to 0.83 USD.
Despite this, institutional investment funds still show confidence in Ethereum's long-term potential. For instance, ETHZilla Corp recently purchased an additional 7,562 ETH at an average price of 4,531 USD, raising their total Ethereum holdings to over 102,000 ETH, worth more than 470 million USD. At the same time, the company announced a stock buyback program worth 250 million USD, indicating optimism about Ethereum's long-term growth.
What is the state of macro liquidity and market correlation?
A notable point is the divergence between Bitcoin and global M2 liquidity growth, while history shows that Bitcoin often closely follows this metric. Expert Raoul Pal comments that such divergences are not uncommon and Bitcoin tends to sync back with global liquidity cycles.
A weakening USD usually positively impacts cryptocurrencies and other risky assets. Conversely, the stock market, such as the S&P 500 and NASDAQ, shows signs of stagnation after a rise due to information from the Federal Reserve, reflecting a temporary balance among asset types.
If Bitcoin continues to approach the oversold region, this could be a precursor to a reversal into a new bullish phase.
"The adjustments of Bitcoin after reaching a peak are a completely natural reaction in the market cycle. Bitcoin holding above the 200-day moving average indicates that the long-term uptrend remains sustainable."
– Cryptocurrency market analyst, Market Report, 2024
Frequently Asked Questions
Is Bitcoin currently in an oversold phase?
Bitcoin is approaching the oversold region, which may indicate a potential recovery in the short term based on technical analysis and market cycles.
Is the simultaneous drop of altcoins a bad sign for the market?
The decline of altcoins is a reaction to natural cycles and selling pressure from large investors, not indicative of a recession in the entire cryptocurrency market.
Do large organizations still trust Ethereum?
Large investment funds continue to buy Ethereum with hundreds of millions of USD, demonstrating solid confidence in its long-term growth potential.
How does macro liquidity affect Bitcoin?
Bitcoin tends to closely follow global liquidity growth; however, there is currently a divergence that will adjust and synchronize in the future.
How do the USD index and stock market affect cryptocurrencies?
A weak USD helps increase cryptocurrency prices, while the stock market correction reduces selling pressure and creates a more balanced state for risky assets.
Source: https://tintucbitcoin.com/tien-dien-tu-mat-940-trieu-usd/
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!
