Why Bitcoin and Altcoins Are Falling

The cryptocurrency market is back in a bear market as the global cryptocurrency market cap fell 20% to a low of $2.15 trillion today. market capitalization has fallen by more than 4.20% in the past 24 hours. Bitcoin price hit a 24-hour low of $57,800, falling back to the key support level, risking a drop to $52,000.

Altcoins including Ethereum, BNB, Cardano, Exchange rate riskand Toncoin are down more than 5%. While Solana ecosystem tokens and meme coins, as well as some AI coins, have seen double-digit declines in the last 24 hours.

Cryptocurrency market sentiment turns back to fear amid panic selling by investors ahead of Mount Gox $10 billion in BTC and BCH redemptions starting this week. JPMorgan and CoinShares warned of a market shakeup amid concerns about a potential sell-off by lenders.

The cryptocurrency market is officially in a bear phase

According to Coinglass, $300 million in cryptocurrency has been liquidated in the last 24 hours. Over 102,000 traders have been liquidated, with the largest single order liquidation on cryptocurrency exchange OKX, as someone traded $4 million worth of ETH for USD.

Nearly $250 million in long positions and $50 million in short positions were liquidated in the last 24 hours. Investors lost over $90 billion in the last 24 hours as the cryptocurrency market cap fell from $2.24 trillion to $2.15 trillion.

In the meantime, over 17,500 BTC options of notional value of $1.02 billion are set to expire, with a put-call ratio of 0.76. The maximum pain point is 62,500, which indicates that Bitcoin price will remain under selling pressure as BTC has dropped below $59k today.

In particular, the put/call ratio has risen above 1.09 over the past 24 hours, with put volume above 17,200 and call volume near 15,793. This indicates that options traders have become strongly bearish on Bitcoin.

Source: Deribit

Implied volatility (IV) across all timeframes is showing significant declines, meaning a market recovery in uncertain price conditions will see the BTC price plummet below $70,000.

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Macroeconomic impacts continue to accumulate

Chairman of the Fed by Jerome Powell The latest speech and the release of the FOMC minutes confirmed the hawkish stance of Fed officials on rate cuts this year. The election saga with Trump in the lead after the latest debate has added to the pressure, and Fed officials are awaiting more data on US inflation and the labor market.

CME FedWatch points to two rate cuts this year. The probability of a 25 bps rate in September jumped to 66.5% from 59% last week. Weak U.S. economic data has boosted bets on Fed rate cuts this year.

US Dollar Index (DXY) settled around 105.3 on Thursday after hitting a three-week low in the previous session. Also, the 10-year U.S. Treasury yield fell to 4.35% after the latest ISM and employment data showed a slowdown in the labor market.

Analysts predict that a market bounce could come anytime and shorting Bitcoin and altcoins could be the worst decision. Therefore, they believe that there will be a consolidation near the current level and a bounce above $61k by the end of the week.

“A drop in USDT liquidity will not stimulate BTC growth, on the contrary, the growth will demonstrate the demand for coin purchases,” according to one on-chain analyst.

Read also: Donald Trump’s Presidency May Trigger a ‘Global Hash Wars’ With BTC Reserves, Says Bitcoin Maxi

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