Cryptocurrency markets face decline with continued losses in Solana, XRP, and Dogecoin.
In the past week, the cryptocurrency market has shown signs of late-cycle behavior, according to Singapore-based trading firm QCP. The market has been trading in a narrow range for two consecutive weeks, with major altcoins experiencing significant falls.
On Thursday, a correction in major altcoins occurred, with XRP, Solana, and Dogecoin losing more than 5%, 5.9%, and 7% respectively. Bitcoin, on the other hand, has held steady, despite a wave of liquidations that has seen over $250 million wiped out daily for five straight days.
The fading risk appetite is weighing on major altcoins, even as Bitcoin maintains its stability. Shawn Young, Chief Analyst of MEXC Research, attributes this to the U.S. dollar's recent strength and rising real yields, which are putting pressure on the crypto market.
The liquidation of over $630 million in leveraged positions, most of which were long bets, has also contributed to the market downturn. This event reflects rapidly shifting investor sentiment and forced selling, leading to heightened investor caution and profit-taking pressure across altcoins.
Bitfinex analysts believe the market is approaching a critical juncture due to excess leverage in altcoins, making it vulnerable to a liquidation cascade. The recent market retracement is also attributed to cautious sentiment amid thin summer liquidity among investors.
The correction in major altcoins coincides with a brief dip in Bitcoin on Thursday. XRP, Solana, and Dogecoin are down respectively on Decrypt's reporting day.
The general waning momentum and bearish technical setups for altcoins are also factors contributing to their declines. XRP, for instance, has fallen almost 12% over a week, despite earlier highs, and Dogecoin's price levels are approaching key support zones around $0.218 and $0.202.
In conclusion, the combination of leveraged liquidations, profit-taking, cautious investor sentiment, and prevailing technical weakness are the primary headwinds driving these sharp declines in major altcoins today. The market may have to contend with these pressures for some time before finding fresh momentum.
- In the crypto market, Ethereum (ETH), similar to other major altcoins, has experienced significant falls over the past week, despite Bitcoin maintaining its stability.
- Shawn Young, Chief Analyst of MEXC Research, claims the U.S. dollar's recent strength and rising real yields are putting pressure on the crypto market, causing altcoins to fall.
- Although Bitcoin corrects along with major altcoins, its response to the liquidation of over $630 million in leveraged positions has been more resilient compared to altcoins.
- Investors are displaying heightened caution and profit-taking pressure across the crypto market, with bearish technical setups for altcoins like XRP and Dogecoin contributing to their declines.
