Bitcoin BTC/USD experienced a significant drop of nearly 10%, reaching a preliminary low of $92,250. This downturn can be traced back to the Federal Reserve’s recent hawkish move and a mix of profit-taking and various technical market forces, as outlined by industry experts.
Following suit, Ethereum ETH/USD has also faced declines, falling 16% to around $3,115. Ripple XRP/USD has succumbed to an 18% decrease, while BNB BNB/USD is down 12%, sitting at $618. Smaller altcoins have not been spared either, with Dogecoin DOGE/USD plummeting a harsh 28% and both Shiba Inu SHIB/USD and SUI SUI/USD losing approximately 25% of their value in just a day.
In a recent conversation with Benzinga, Forest Bai, co-founder of Foresight Ventures, emphasized that this market decline is primarily influenced by the Federal Reserve’s tight monetary policy and reduced hopes for upcoming rate cuts, which have inevitably limited macro liquidity. Bai commented, “Bitcoin’s recent pullback marks the first significant market adjustment since the post-U.S. election euphoria,” pointing out that 20% corrections are standard in bull markets, serving more as a consolidation phase rather than indicating any trend reversal.
Despite the turbulence, Bai remains hopeful, citing strong institutional inflows and analytics from on-chain data that suggest long-term holders are seizing the opportunity to capitalize on their investments, resulting in a notable $2.1 billion profit.
The situation, however, is multifaceted. Raj Kapoor from the Blockchain Governance Council explained to Benzinga that this latest crash isn’t simply about numbers falling but is entangled with various economic forces at play. He alluded to profit-taking, panic selling, and technical indicators revealing mean reversion patterns, all contributing to the volatility.
In a humorous turn, Stephen Colbert even joked about the current situation, dubbing a meme coin “Fartcoin” as “silent but wealthy,” highlighting the quirky and often unpredictable nature of cryptocurrencies.
On a more serious note, Kapoor hinted at potential recovery signs, referencing Bitcoin’s cup-and-handle pattern that could possibly lead to a surge towards $120,000. Nonetheless, he advised caution as further declines might still occur before a genuine recovery manifests.
Alex Kuptsikevich, the chief market analyst at FxPro, provided a stark assessment of the market’s performance, with the total crypto market cap shrinking by 4.4% to approximately $3.36 trillion, down over 11% from its recent peak. He added, “Bitcoin is back below $100K, getting support at $96K this morning,” warning that a slip below $94.5K could trigger more bearish trends.
The market has seen substantial liquidations, totaling $1.38 billion within the last day, with a striking $1.21 billion coming from long positions, as per data from CoinGlass. This downturn reflects a movement away from speculative assets toward real-world asset tokenization and decentralized finance, according to Bai, suggesting an evolution in market behavior that has left Bitcoin and several altcoins exposed.
Despite facing immediate struggles, experts unanimously agree that the resilience of Bitcoin, which still maintains crucial psychological levels, coupled with ongoing institutional interest and a generally optimistic mid-term outlook, signals that this crash could merely be a fleeting setback in a broader bull cycle.
