The cryptocurrency market is reeling after its worst three-day performance in nearly a year, wiping out a staggering $510 billion from its total value since August 2nd. This dramatic sell-off coincides with a downturn in traditional equities, with the S&P 500 falling 4.4% over the same period.
Weak Economic Data Spooks Investors
Several factors are believed to be driving the crypto market selloff. Disappointing economic data, including weak employment figures and sluggish growth from major tech companies like Microsoft and Intel, have dampened investor sentiment. Additionally, fears of a looming recession have caused capital to flow out of riskier assets like cryptocurrencies and towards safer havens.
Bitcoin and Ethereum Feel the Squeeze
The leading cryptocurrencies, Bitcoin (BTC) and Ethereum (ETH), haven’t been spared. As of August 5th, Bitcoin prices have plummeted 10% in a single day, extending its weekly losses to a staggering 20%. Ethereum fared even worse, dropping 18% on the day and 28% over the past week.
Solana Takes the Hardest Hit
Solana (SOL), a popular Layer-1 blockchain network, has been the most significant loser among the top ten cryptocurrencies. Its price has plunged 30.6% since July 30th, with some analysts pointing to potential selling pressure from major trading firm Jump Crypto as a contributing factor.
Also Read: XRP Rallies 5% Amidst Crypto Chaos, Whales Accumulate
The Crypto Fear & Greed Index, a gauge of market sentiment towards Bitcoin and crypto, reflects the current anxiety. The index has tumbled into “fear” territory, currently hovering around a score of 26.
The near future for the crypto market appears challenging. Recovering from these losses will likely depend on renewed buying activity from institutional investors, especially in the spot and derivatives markets. Additionally, Bitcoin’s price action will be closely watched as it navigates a technical gap in CME (Chicago Mercantile Exchange) trading – a gap that can only be filled during traditional trading hours.
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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