The cryptocurrency market is once again under pressure, with Bitcoin slipping below the critical $60,000 mark amid a broader market downturn. The price of Bitcoin, the world’s leading cryptocurrency, fell by 5.4% in the past 24 hours, bringing it down to $59,600 as of the latest reports. This decline is part of a wider trend that has seen the entire crypto market drop by 6% in the same period.
Late Tuesday, Bitcoin’s price briefly dipped below $60,000, marking another instance of the cryptocurrency falling below this significant psychological threshold. According to The Block’s data, the price of Bitcoin has dropped 5.99% over the past 24 hours, settling at $59,600 at the time of writing. The broader market sentiment reflects this downturn, with several major cryptocurrencies experiencing even steeper declines.
Among the top ten cryptocurrencies, Ether, the second-largest by market capitalization, saw a substantial drop of around 7.7%, now trading at $2,480. Other prominent digital assets like Solana and Dogecoin also faced significant losses, with Solana down 7% to $147.5 and Dogecoin losing 6.3% of its value to trade at $0.099. The overall cryptocurrency market has suffered a 6.3% decline in the past day, underscoring the widespread impact of this latest downturn.
Rachael Lucas, a Crypto Analyst at BTC Markets, notes that there isn’t a single catalyst responsible for the recent market downturn. Instead, a combination of factors seems to be at play. “Technical indicators show that the U.S. Dollar Index (DXY) is oversold on the daily chart, which could suggest a potential rebound in the dollar, traditionally leading to downward pressure on risk assets like cryptocurrencies,” Lucas explained.
Lucas also highlighted the role of seasonality in the market’s performance, pointing to the so-called “September Effect.” Historically, September has been a challenging month for financial markets, often leading to underperformance due to factors such as portfolio rebalancing, tax-loss harvesting, and increased caution ahead of U.S. elections.
The downturn has been exacerbated by a surge in crypto liquidations. According to Glassnode data, over $287 million worth of long crypto positions were liquidated in the past 24 hours, compounding the market’s challenges. “Short-dated volatility was bid, with traders scrambling to buy downside protection (puts), as underlying momentum remains poor from the supply overhang and lack of on-chain catalysts in the near term,” said Augustine Fan, Head of Insights at SOFA.org.
Ether has been hit particularly hard, with prolonged net outflows from spot Ether ETFs contributing to its struggles. Monday marked the eighth consecutive day of negative flow for Ether ETFs. “Ether has struggled more than other cryptocurrencies as the Ethereum Foundation has been criticized for its $100 million budget that comes from selling ETH, which would add more sell pressure,” commented independent market researcher Nick Ruck.
From a technical perspective, Bitcoin faces additional hurdles. BTC Markets’ Lucas warned that Bitcoin could fall to around $56,000 if it continues to trade below its 50-day moving average, a crucial technical level on the daily chart. Currently, Bitcoin’s 50-day moving average sits at $61,991, according to data from Trading View.
As the cryptocurrency market continues to navigate these challenges, all eyes are on Bitcoin and other major digital assets to see whether they can recover from this latest dip or if further declines are on the horizon.
A finance graduate, Maheen Hernandez has been drawn to cryptocurrencies ever since Bitcoin first emerged in 2009. Nearly a decade later, Maheen is actively working to spread awareness about cryptocurrencies as well as their impact on the traditional currencies. Appreciate the work? Send a tip to: 0x75395Ea9a42d2742E8d0C798068DeF3590C5Faa5
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