Cryptocurrencies suffered their second-worst crash of 2024, leading to huge losses for investors. The market saw a notable decline as global interest in Bitcoin exchange-traded funds (ETFs) cooled. Over the past week, the top 100 cryptocurrencies crash slid by 5%, marking the steepest decline since April.
Cryptocurrencies Crash Driven by Investor Hesitation
The cryptocurrencies crash was primarily driven by investor uncertainty, particularly in the U.S. markets. Bitcoin’s price fell below $63,000 on Monday, its lowest level since May; this decline is part of a six-day consecutive loss streak, fueled by widespread confusion regarding potential interest rate cuts by the Federal Reserve. As a result, demand has plummeted as investors have adopted a wait-and-see approach, halting their purchases until there is more clarity on the Fed’s policy.
Experts have pointed out that the current slump is characterized by low volatility, soft trading volumes, and unbalanced order books, particularly when prices approach the edges of their range. This combination of factors has exacerbated the downward trend, making it difficult for prices to stabilize.
Ethereum and Solana Hit Hardest
Among the cryptocurrencies, Ethereum (ETH) and Solana have experienced some of the most severe declines. Ethereum is currently on its longest streak of weekly declines since 2023. Solana, once a favorite among digital-asset hedge funds, is enduring its worst downward slump since 2022.
Bitcoin, despite having reached an all-time high of $73,798 in March, has underperformed compared to traditional assets such as stocks, bonds, and gold this quarter. At the time of reporting, Bitcoin was down 3.14% and trading at $62,375.
The overall sentiment in the cryptocurrency market remains bearish as investors continue to seek stability amid uncertain economic conditions. As the market grapples with these challenges, the path to recovery remains unclear, leaving many to wonder when the volatility will subside.
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