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06/24/2024

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Crypto Market Faces Steep Decline as Bitcoin Dips Below $62,500

The price of Bitcoin fell below $62,500 earlier today, marking a notable dip as the broader cryptocurrency market experienced one of its steepest weekly declines of the year. Bitcoin traded at a monthly low...

Crypto Market Faces Steep Decline as Bitcoin Dips Below $62,500

The price of Bitcoin fell below $62,500 earlier today, marking a notable dip as the broader cryptocurrency market experienced one of its steepest weekly declines of the year.

Bitcoin traded at a monthly low of around $62,242 at press time, following a continuous six-day streak of outflows from US Bitcoin ETFs and growing uncertainty over monetary policies. According to CoinMarketcap data, this represents a 6% decrease over the past seven days.

Ethereum, the second-largest cryptocurrency, has mirrored Bitcoin’s downturn. In the same period, Ethereum dropped over 6%. After approaching $4,000 earlier this month, Ethereum’s price has fallen to $3,372.

Federal Reserve’s Interest Rate Decision

The Federal Reserve’s recent decision to maintain its benchmark interest rate has influenced the crypto market downturn. The Fed indicated it would cut rates only once this year, a reduction from the previously projected three cuts. Although there are signs of cooling inflation, it remains below the Fed’s 2% annual target.

High interest rates typically diminish the appeal of speculative assets like cryptocurrencies while increasing the attractiveness of traditional financial instruments.

The overall cryptocurrency market cap has fallen to $2.39 trillion, experiencing a 3.5% correction in the last 24 hours. Major altcoins have also faced significant declines: Binance Coin (BNB) is down 5.3%, Solana (SOL) dropped 14.8%, and XRP has decreased by 2.34% over the past week.

Source: Crypto Bubbles

Telegram’s TON token, which rose substantially recently, is now down nearly 13% from its all-time high of $8.25, reached earlier this month. Popular meme coins have also been affected; Dogecoin, Shiba Inu, and PEPE have dropped 5%, 6%, and 10% in the past 24 hours. Dogwifhat has lost almost half of its gains from the previous week.

Liquidations and Market Reactions

The steep declines have resulted in liquidations, with major tokens sliding to 7.5% in the last 24 hours. Bitcoin reversed its gains from the previous week, leading to over $150 million in bullish bets being liquidated over the weekend. Bitcoin lost 3%, while Ethereum, Cardano’s ADA, and BNB experienced similar losses. Solana dropped 7%, trading near $120 on Monday morning. Meme coins Dogecoin and Shiba Inu also saw declines of nearly 5%.

The recent downturn has been partly attributed to substantial sales by Bitcoin miners and large holders. Singapore-based QCP Capital noted on X

“Miners have been under tremendous pressure to sell given higher breakeven prices post-halving. Miner BTC holdings have dropped to the lowest level in the past 14 years, with total reserves lower by 50,000 from the start of the year.”

Additionally, the market has reacted to news of the German government moving a significant amount of Bitcoin to exchanges. The German Federal Criminal Police Office (BKA), which had seized nearly 50,000 BTC from a piracy site in 2013, began transferring tens of millions of Bitcoin to crypto exchanges like Coinbase and Kraken last week.

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