The cryptocurrency market kicked off the week on a downward note, with Bitcoin facing a minor gain of 0.02% and hovering around $26,136.36, as reported by Coin Metrics. Bitcoin had experienced its most significant weekly decline since May, losing 11% over the past week due to a sudden drop that began on Wednesday. Similarly, Ether showed a 0.18% decrease, settling at $1,674.
Altcoins, however, demonstrated more significant downward movements on Monday. Ripple’s XRP saw a nearly 5% slide, while coins linked to Ethereum competitors experienced losses of around 3%. This included Solana, Polygon, and Cardano. DeFi tokens also exhibited a decline, with the Cosmos token dropping by more than 3% and Uniswap’s coin registering a 2% decrease.
External pressures, notably from China, were highlighted as a significant driver for these sell-offs by Chris Martin, the Head of Research at Amberdata. The influence of Asia in the crypto market, particularly with the opening of doors in Hong Kong and Singapore, played a substantial role. However, due to broader economic challenges, the anticipated bull market might not unfold as initially expected.
While Bitcoin and Ether have typically been considered as stores of value in comparison to other cryptocurrencies, they too suffered significant declines of 11.5% and 9.8%, respectively, over the past seven days. This suggests that even these major players are not completely immune to market fluctuations. Martin also pointed out that altcoins tend to experience more pronounced price swings, and as institutional adoption increases through various channels like ETFs and derivatives, their volatility could potentially stabilize.
Bitcoin’s performance throughout the third quarter, historically a less active period for cryptocurrencies, had been lackluster. The cryptocurrency is now down by 14% for the quarter and approximately 10% for August. Hopes for a positive impact from an approved Bitcoin exchange-traded fund or coherent crypto-related legislation from Congress were dampened. Instead, the focus shifted to the Federal Reserve’s emphasis on real rates and the China Evergrande Group’s bankruptcy protection filing, both contributing to downward pressure on the crypto market.
Despite the recent market fluctuations, including the substantial drop the previous week, Bitcoin remains up by roughly 57% in 2023.
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