Saturday, July 13, 2024

Why are many major cryptocurrencies seeing a downward trend?

Bitcoin recently lost 20% of its value. The fall in BTC’s value was due to a mix of two reasons – investors taking in profits and the overall macroeconomic situation. These twin reasons led to investors selling crypto assets worth almost a billion dollars.

BTC’s initial downward slide began with a 12% fall to $47,495. A little later, it had fallen further to $41,967.5 – a cumulative fall of 22% for the day.

This downward trend in crypto assets was not restricted to BTC alone. Ether, the coin of the Ethereum blockchain network also fell by over 10%. A report in Coingecko, a platform that collates crypto data, highlighted that there was a fall of nearly 15% in the market cap of the 11,392 coins the platform monitors. The market cap after the fall stands at $2.34 trillion. The market cap before the fall had crossed $3 trillion. At the time, the value of BTC had touched a record high of $69,000.

Reasons

The steep fall witnessed is on the back of an overall volatile week for the larger financial markets. The fall was due to the surge in the omicron variant of the virus and also due to a report of the fall in US job growth.

Some analyst reports also indicated a movement of crypto coins from wallets to exchanges. Such trends usually presage an intent to sell.

This large-scale sale of crypto assets also precedes the testimony of cryptocurrency executives to US lawmakers on the Financial Services Committee. This was a first when crypto executives would be testifying before lawmakers. This comes at a time when lawmakers are trying to understand cryptocurrencies and mulling ways to regulate the crypto market.

Platform Coinglass reported that there had been a liquidation of $1billion worth of cryptocurrencies recently. This was mainly on the exchange Bitfinex. The current dip is also an opportunity to buy – for those investors who thought that they had earlier missed the opportunity. The bearish trend in the market was also indicated by a fall in the bitcoin funding rates.

Cryptured Team
Cryptured Team
The writers team at Cryptured.com is composed of passionate and experienced journalists who cover the latest developments in the crypto and blockchain space. They aim to provide accurate, unbiased and easy-to-understand news and information for their readers, as well as insights and analysis from industry experts. The writers team is always on the lookout for new and exciting stories that can help the general public learn more about the potential and challenges of these technologies.
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