The cryptocurrency market experienced a downturn on Monday, with leading coins mirroring declines seen in blue-chip stock indices. Bitcoin, the leading cryptocurrency, trended downwards throughout the day, briefly dipping below $63,000 before stabilizing around the lower boundary of $63,000. Ethereum also saw losses, slipping below $2,700 midday and trading around the high $2,600s.
The decline in cryptocurrency prices was accompanied by significant liquidations, totaling $107.46 million in the past 24 hours. Long liquidations accounted for 83% of the total, indicating that investors who were betting on higher prices were forced to sell their positions. The total long volume for Bitcoin surged 60% in the last 24 hours, while short volume declined by 69%, suggesting a shift in sentiment among traders.
The Cryptocurrency Fear & Greed Index, a gauge of market sentiment, moved from “Greed” to “Neutral”, reflecting the pullback.
Meanwhile, the global cryptocurrency market capitalization stood at $2.21 trillion, following a 1.76% drop in the last 24 hours.
The stock market also experienced mixed results on Monday. The Dow Jones Industrial Average gained 0.16%, closing at a record high, while the S&P 500 slipped 0.32% and the tech-focused Nasdaq Composite dropped 0.85%. The decline in the Nasdaq was attributed to a 2.9% decline in shares of AI giant NVIDIA Corp. NVDA, ahead of its anticipated second-quarter earnings report.
Despite the recent downturn, market optimism persists following Fed Chair Jerome Powell’s clear message about lowering interest rates next month.
Prominent cryptocurrency analyst Ali Martinez highlighted key levels to watch for Bitcoin. He stated that Bitcoin could rise to $64,200 if the support level at $63,500 holds. However, if the support breaks, Bitcoin could fall to $62,800.
On-chain analytics firm Santiment noted a disproportionately larger decline in Bitcoin’s open interest on exchanges compared to Ethereum and Solana. This suggested that investors were shifting their focus to altcoins, driven by confidence in their upside potential and a desire to diversify risk.
The recent market movements highlight the volatility inherent in the cryptocurrency market and the need for investors to carefully consider their risk tolerance and investment strategies.
