The cryptocurrency market experienced a downturn on Monday, with leading cryptocurrencies like Bitcoin and Ethereum retracting from their previous day’s gains. Bitcoin, after reaching $64,600 on Sunday following pro-crypto comments from Democratic presidential candidate Kamala Harris, dipped below $63,000. Ethereum, which closed at $2,600, also started to decline after the market close, mirroring the trend in Bitcoin.
Despite Bitcoin’s recent surge, a notable disparity emerged between the performance of the two top cryptocurrencies over the past week and their year-to-date returns. Ethereum, which has lagged behind Bitcoin this year, outperformed Bitcoin over the week. This trend suggests a potential capital rotation away from Bitcoin to other cryptocurrencies, possibly influenced by the Federal Reserve’s aggressive 50 basis point rate cut.
The cryptocurrency market saw significant liquidations, with over $124 million being liquidated in the last 24 hours. Bearish bets accounted for $67 million of this amount, indicating a shift in market sentiment towards a more bearish outlook. However, Bitcoin’s funding rate on major exchanges like Binance remained positive, suggesting that bullish traders continue to dominate the market. The Open Interest in Bitcoin futures, however, experienced a slight decline of 0.25% in the last 24 hours. The market sentiment remains “Neutral,” as indicated by the Cryptocurrency Fear & Greed Index, suggesting a balance between market forces.
While the market experienced a correction, some individual cryptocurrencies performed well. Celestia (TIA), Arweave (AR), and NEAR Protocol (NEAR) emerged as top gainers over the past 24 hours, with gains ranging from 14.02% to 21.46%. The global cryptocurrency market capitalization currently stands at $2.22 trillion, following a marginal contraction of 0.05% in the last 24 hours.
Meanwhile, the stock market surged to new highs on Monday. The Dow Jones Industrial Average climbed 61.29 points, or 0.15%, to close at 42,124.65. The broader S&P 500 index also hit a record high, closing at 5,718.57, up 0.28%. The tech-focused Nasdaq Composite gained 0.14% to close at 17,974.27. Investors are carefully monitoring macroeconomic data, including weak manufacturing sector data and the weekly jobless claims expected to be released on Thursday, to gauge the Federal Reserve’s path towards a soft landing.
Cryptocurrency analysts remain divided in their outlook on Bitcoin and Ethereum. Rekt Capital, a popular cryptocurrency analyst, believes that Bitcoin is due for a breakout, based on historical patterns that suggest a breakout typically occurs 154 to 161 days after a halving event. It is currently 157 days after the last Bitcoin halving, prompting Rekt Capital to suggest it is “Breakout Time” for Bitcoin.
Wolf, another widely-followed analyst, predicts a strong upside for Ethereum in the coming days. Wolf believes that the dips below $2,300 presented prime buying zones and that Ethereum bulls are now poised for a strong push.
As the market continues to navigate volatility, analysts and investors alike are closely watching developments in both the crypto and traditional markets, seeking to assess the future direction of these asset classes.
