The cryptocurrency markets experienced a significant downturn over the past week, with a sudden bullish rally over the weekend hinting at a potential recovery. However, the gains were short-lived as Bitcoin’s price fell below the crucial support level of $102,800, causing a ripple effect across the altcoin market.
Ethereum dipped below $2400, Solana hovered around $160, XRP approached $2.3, and Cardano neared $0.7. Even meme coins like BOOK OK MEME, dogwifhat, Fartcoin, and Mog Coin saw losses of over 8%. The lack of any token showing gains indicated a market dominated by bears.
Several factors contributed to the market decline, including profit-taking on Bitcoin, decreased ETF inflows, a security breach at Coinbase, and regulatory action against Haowang Guarantee’s illicit activities. Moody’s downgrade of the US credit rating and warning about the rising national debt also impacted both crypto and stock markets.
Despite the negative sentiment, there are signs of institutional interest in Bitcoin, with MicroStrategy acquiring more BTC and XRP and Micro XRP Futures launching on CME Group. BlackRock’s BTC ETF, IBIT, has seen significant inflows compared to the GOLD ETF.
While the market momentum has cooled, retail investors are increasing their holdings, and whales are accumulating off-exchange. The BTC MACD signals caution with a bearish crossover, and open interest has decreased, suggesting reduced leverage. A potential consolidation or slight dip could occur unless buyers re-enter the market quickly.
Stablecoin inflows are rising, and a breakout above $107K with substantial volume could accelerate the upward trend. However, there is still a risk of consolidation or a minor pullback in the near term. Overall, the market outlook remains uncertain, with various factors influencing the direction of cryptocurrencies in the coming days.