In the ever-volatile cryptocurrency market, Dogecoin (DOGE) and XRP (XRP) have emerged as the major losers this week, shedding 5% and 4%, respectively. This downturn comes as traders cash in on profits from a recent upward trend, which was partly fueled by a significant endorsement from Elon Musk for Dogecoin and fundamental developments supporting XRP.
The broader market, represented by the CoinDesk 20 (CD20) index, saw a decline of nearly 2%, with Bitcoin (BTC) also slipping 1% after failing to maintain its impressive rally that brought it close to the $70,000 mark. Analysts had anticipated a breakout towards $80,000 in the coming weeks, particularly as the U.S. presidential elections approach. Despite the losses, traders remain hopeful, viewing the election period as a potential catalyst for renewed market enthusiasm.
The downturn in prices for Dogecoin and XRP starkly contrasts their recent performances, where they led the gains among major tokens over the past week. The market sentiment shifted as Bitcoin’s resistance at $70,000 became evident, prompting increased selling pressure. Alex Kuptsikevich, a senior market analyst at FxPro, commented on this, stating, “The main reason for the entire crypto market’s subsidence seems to be Bitcoin, which the bears defended against an assault on the $70K level.”
The recent trend has not only affected major tokens but also smaller altcoins. Memecoin Bonk (BONK) and governance token APE saw significant losses, dropping over 7%. This slowdown in momentum can be attributed to a pause in stablecoin issuances, which are crucial for providing liquidity in the market. Kuptsikevich noted, “Stablecoin volume has not increased since late September, setting up a potential pause in the growth of the broader cryptocurrency market.”
Also Read: Meme Coins On The Rise – Dogecoin At $0.14 And Shiba Inu Holding Strong At $0.00001796
Investors are keeping a close watch on Bitcoin ETFs, which faced notable outflows this week, with a reported net loss of $80 million on Tuesday. Ark Invest’s ARKB experienced a record outflow of $134 million, while BlackRock’s IBIT managed to attract $42 million in inflows, underscoring the mixed sentiment surrounding crypto investment products. Additionally, BlackRock’s ether ETF recorded inflows of $11 million, but overall, many products showed no significant activity.
As the market stabilizes, the dynamics of liquidity and investor sentiment will play a crucial role in determining the next steps for cryptocurrencies. With elections on the horizon and Bitcoin’s price hovering below key resistance levels, traders are cautiously optimistic, eyeing potential rebounds despite the current setbacks. The landscape remains turbulent, but historical trends suggest that renewed interest could emerge as market participants adjust their strategies in response to evolving conditions.
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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