The crypto market is facing significant losses after Bitcoin’s second-largest weekly decline in 2024.
This drop is attributed to the decreasing demand for Bitcoin exchange-traded funds (ETFs), uncertainty surrounding the U.S. Federal Reserve’s monetary policy, and a lack of interest in digital assets.
Bitcoin’s price reached $58,000 yesterday, reaching its lowest point in a month. Moreover, continuous withdrawals from the U.S. ETFs dedicated to the digital asset have negatively impacted the top token by market value.
The crypto market failures align with doubts about the Federal Reserve’s ability to quickly lower interest rates after reaching a two-decade high. Notably, Ether and Solana have experienced their longest weekly declines since last year and 2022, respectively. Ethereum saw a decrease in value, despite reports of significant accumulation by long-term holders during the price decline.
Other major cryptos are also reporting daily decreases ranging from 5% to 12%, indicating that the broader altcoin market is also in a slump. This downward trend persists despite fund managers preparing to introduce the first U.S. ETFs that directly invest in Ether, the second-ranked cryptocurrency.
On the other hand, Solana has gained favour among several hedge funds involved in digital assets. Earlier this year, traders were optimistic about digital assets, expecting a more lenient approach from the Federal Reserve as inflation subsides and a potential shift in U.S. regulators’ attitudes. However, the current market conditions have dampened these expectations.
Despite the crypto market starting the year off strong and Bitcoin hitting an all-time high of $73,798 in March, gold, bonds, and stocks have actually performed better than the cryptocurrency this quarter.
Market observers are closely monitoring the 200-day moving average, currently at $57,500, as a potential support level for Bitcoin.
