Bitcoin has recently experienced a significant decline, falling below $97,000 after briefly surpassing $100,000 earlier in the week. This has had a ripple effect across the cryptocurrency market, with several major altcoins also facing substantial losses.
Dogecoin has dropped 8% to $0.428, while XRP has seen a staggering 15% decline, settling at $2.38. Solana is trading just under $222 after a 6% decrease, and Ethereum has fallen 7% to $3,786. Meme coins like Popcat and Peanut the Squirrel have plummeted over 20%.
The market sentiment has been grim, with over $1.71 billion liquidated across various exchanges, impacting over half a million traders. Major platforms such as Binance, OKX, and Bybit have reported the highest volumes of liquidations, with Bitcoin leading the charge at $86 million.
Despite the downturn, there are signs of institutional interest in Bitcoin, with a significant outflow of 8,455 BTC from Coinbase Advanced Exchange, suggesting that institutional investors are continuing to accumulate Bitcoin. The "Realized Profit" metric has decreased from $10.5 billion daily to $2.5 billion, potentially alleviating sell-side pressure. Futures funding rates have also normalized, indicating a decrease in speculative trading activity.
While Monday recorded net negative flows of $90.5 million in Bitcoin ETFs, last week saw impressive inflows of $2.7 billion. The recent price movements have been influenced by broader market events, including Bitcoin's all-time high of $103,679 reached last week. Market optimism during this period has been partly fueled by political developments, including the re-election of Donald Trump and his appointment of David Sacks to a key position in AI and cryptocurrency policy.
The decline in Bitcoin's price has also affected other cryptocurrencies, with XRP, Cardano, and Dogecoin seeing notable losses. Analysts are monitoring institutional activity and ETF support as potential indicators of recovery. The presence of institutional investors and recent inflows into Bitcoin ETFs suggest underlying strength in the market. The coming days will be crucial in determining whether this strength can translate into a more stable and upward trajectory for cryptocurrencies.