The cryptocurrency market is witnessing a significant downturn, particularly for the three largest digital assets: Bitcoin, Ethereum, and XRP. After record price hikes last week, these currencies have experienced notable declines, with Ethereum down 5.2%, XRP down 3.8%, and Solana down 6%. Even the meme coin Dogecoin has not escaped the downward trend, losing 5.2% of its value.

The cryptocurrency market faces a new wave of declines

According to a recent report from Barron's, the recent decline may be due to a combination of several global economic 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, emphasizes the impact of global economic indicators on cryptocurrency prices. He points out that Bitcoin's retreat after hitting a record high indicates that volatility can accompany such rapid price changes, even as cryptocurrency adoption among institutions continues to rise.

Analysts believe that the current digital asset market appears to be balancing between optimism and caution, navigating both structural demand and speculative risk.

Looking ahead, market analysts are closely monitoring the upcoming statements of Fed Chairman Jerome Powell at the Jackson Hole Conference.

Any signs of a hardline stance or delays in interest rate cut expectations could put pressure on risk assets, including cryptocurrencies. Conversely, dovish signals could help maintain 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 direction. He predicts that the price will move sideways in a narrow range of about 8% until September.

Although the medium-term outlook remains optimistic, he predicts there will be a significant drop in September, warning that it could be a challenging month for the cryptocurrency market.

Despite the current retreat, on-chain data shows that large wallets continue to accumulate, indicating that major investors remain optimistic about the long-term potential of cryptocurrencies.

The expert also emphasizes that the funding rate is quite healthy, indicating that the market does not face immediate selling pressure despite the recent declines of Bitcoin and Ethereum leading to the current downturn.

The daily chart shows that BTC has dropped to the $115,000 range. Source: BTCUSDT on TradingView.com

As of the time of writing, Bitcoin is trading at $115,630, down 6.5% from its recent record high of $124,000. In contrast, Ethereum is gradually approaching its record high with declines halting at the $4,300 support level.

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