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Why is Crypto Down Today? Here’s What You Need to Know
The cryptocurrency market has taken a sharp decline, with the total crypto market cap dropping by $105-117 billion to $3.72 trillion. Bitcoin, the leading digital currency, has also fallen 2.7% to $115,458 and broken key support levels.
According to reports, over $700 million in leveraged long positions have been liquidated across the market. This sudden increase in forced selling led to a cascade of sell orders, causing further declines throughout the ecosystem.
One major factor contributing to the selloff was the unwinding of XRP’s leveraged positions. The Ripple co-founder Chris Larsen transferred 50 million XRP tokens to centralized exchanges, amounting to around $140 million. This transfer sparked significant selling pressure on the altcoin, resulting in a 12% decline to approximately $3.06.
In addition to this, Ethereum also faced downward pressure, losing 2-3% and trading near $3,600. The second-largest cryptocurrency is struggling with validator exit pressure as over $2.3 billion worth of ETH awaits unstaking from the network.
Despite the massive decline in crypto market capitalization, analysts remain cautiously optimistic about the long-term prospects of cryptocurrencies. Many are viewing this recent weakness as a healthy correction rather than a trend reversal.
The sharp drop in crypto prices also coincides with Donald Trump’s call for aggressive rate cuts to boost the economy. As interest rates rise and inflation concerns grow, investors are seeking safer assets, leaving risky investments like cryptocurrency behind.
Meanwhile, other factors contributing to the downturn include reports of Tether minting $2 billion worth of USDT on Ethereum, sparking market rally speculation. Additionally, PUMP Token’s airdrop dreams were crushed as the token crashed 20%.
On the positive side, BlackRock’s Bitcoin ETF has seen significant growth with $5 billion in inflows in just 10 days, fueling more optimism about cryptocurrency markets.
Overall, this sudden decline is likely to cause some unease among investors. However, considering the overall market conditions and the outlook for long-term trends, analysts remain confident that the recent drop is a healthy correction rather than a trend reversal.
Source: coincentral.com
