Cryptocurrency markets experienced a downturn over the weekend, with Bitcoin (BTC) leading the decline. The lack of a clear direction and dependence on traditional finance are being cited as key reasons for the selloff.
As of Monday morning in Asia, Bitcoin sits just above $58,500, a 4.8% drop in the past 24 hours according to CoinDesk Indices data. This decline triggered a broader market sell-off, with the CoinDesk 20 (CD20) index, representing the top 20 cryptocurrencies, dropping 5.2%. Ethereum (ETH), the second-largest cryptocurrency, fell by 3.5%.
The sentiment appears cautious, with outflows from U.S.-listed exchange-traded funds (ETFs) tracking these assets. Data shows that BTC ETFs lost $89 million, while ETH ETFs saw $15.7 million outflows on Friday.
Further losses were observed across major altcoins. Solana’s SOL and Toncoin (TON) witnessed a 7% dip, while BNB Chain’s BNB fell by 3%. Dogecoin (DOGE) and Cardano’s ADA experienced a 6% and 5% drop, respectively. XRP (XRP) also recorded a 5% decline.
Adding to the bearish outlook are upcoming token unlocks in the coming week for projects like Aptos (APT), Arbitrum (ARB), and The Sandbox (SAND). These unlocks, totaling over $120 million worth of tokens entering the open market, could further depress prices.
Market analysts are divided on the near-term future of Bitcoin. While some, like Augustine Fan, Head of Insights at SOFA.org, warn of a potential further decline based on technical indicators and sentiment, they note that upcoming traditional market data releases could provide upward pressure.
“Crypto prices will likely be rangebound with a bias to the weak side,” Fan told CoinDesk. However, he acknowledges that the impact of Jackson Hole, a key economic symposium happening later this month, remains a wildcard.
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The lack of a clear direction in crypto markets is partly attributed to their dependence on traditional markets. Both the U.K. and U.S. will release their July Consumer Price Index (CPI) data on Wednesday, potentially influencing investor sentiment. Other key releases include Australian consumer confidence, Japan’s Producer Price Index, and earnings reports from major retailers like Alibaba and Walmart later in the week.
Favorable economic data could encourage riskier investments like cryptocurrencies, while negative results could trigger a further downward trend. Investors are closely watching these key events for clues on the direction of the broader market and its potential impact on the crypto sector.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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