The Crypto Market Faces Turbulence with Declining Prices and Reduced DeFi Activities
The cryptocurrency market has experienced a turbulent week, characterized by declining prices and reduced decentralized finance (DeFi) activities. Over the past seven days, the overall cryptocurrency market capitalization has decreased by 6.67%. This decline has affected larger coins, which have experienced significant losses, eroding the gains they had made in previous months.
This week started off on a balanced note for digital assets, with cryptocurrencies reaching new highs. Additionally, there were signs of a breakout as inflows into spot Bitcoin (BTC) ETFs continued. However, investor sentiment towards certain assets dropped mid-week due to macroeconomic factors, leading to losses.
Bitcoin And Altcoins Experience Weekly Losses
The market leader, Bitcoin, has experienced a 5.95% decline this week and a 0.52% drop in the last 24 hours. The decrease in trading volume to $36.1 billion, a 12% reduction from earlier highs this week, reflects the current outlook. Currently trading at $64,779, BTC is 12.3% away from its all-time high of $73,750 reached just nine days ago.
The approval of spot ETFs in the United States has been a game changer for crypto assets, attracting traditional investors to the market. Some experts believe that miners and traders may be positioning themselves ahead of the halving event, which could explain the slight decline in the market.
While the halving event is generally seen as bullish, miners may have been looking to capitalize on the rewards before they were reduced, leading to increased selling pressure. Additionally, crypto miners needed to improve their hashrate in order to compete effectively under the new reward system.
Ethereum (ETH) has experienced larger losses, with a total decline of 9.5% this week and 2.57% in the last 24 hours. The delay in approving its spot ETF has resulted in slight outflows from institutional investors. Other cryptocurrencies such as BNB, Solana (SOL), and Ripple have also seen significant declines of 9.33%, 10.7%, and 2.4% respectively over the past week.
Losses Dampen Crypto Momentum
For months, the crypto market has been exceeding expectations, with significant inflows and key developments in the sector. Bitcoin reached an all-time high, while Ethereum surpassed the $4,000 mark. Both assets have also recorded monthly gains of 25.8% and 14% respectively.
Meme coins also experienced impressive gains last month but have faced slight corrections as crypto prices continue to decline.
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