Ethereum
Main reasons why BTC, ETH, XRP, SOL and DOGE prices are retreating
The crypto market has witnessed volatile trading in recent times with prices of all major cryptocurrencies such as Bitcoin, ETH, SOL, XRP, DOGE, SHIB and others dropping over the past few days. At the same time, the recent stock market crash reflects the persistent bearish sentiment hovering over the market, while weakening investor confidence.
While there are a host of macroeconomic and other concerns, let’s explore some of the potential reasons for the current decline in cryptocurrency prices.
Why is the crypto market down today?
The broader crypto market has seen tumultuous trading so far over the past few weeks, driven by growing inflation concerns, the Fed’s stance on its policy rates, and other related concerns. So here we explore the potential reasons why the crypto market is experiencing slowing dynamics today.
Bitcoin ETF Outflows Trigger Crypto Market Drop
THE cryptocurrency The market saw a slowdown today, due to continued outflows from the US Spot Bitcoin ETF. According to data from Farside Investors, Bitcoin ETFs saw outflows for three days this week, contrasting with two days of inflows.
Over the past two days, the US Spot Bitcoin ETF recorded a significant outflow of $96 million, reinforcing investor apprehensions. However, this comes after a promising start to the week, with a substantial inflow of $217 million into the investment instrument, which also fueled optimism in the crypto market.
At the same time, the predominant factor driving exodus pressure appears to be the persistent exodus of GBTC in grayscale, with over $146 million released in the last two days alone. These back-to-back Bitcoin ETF outflows and the current Grayscale exodus have contributed to the prevailing negative sentiment in the crypto sector.
Inflationary concerns
The current decline in the crypto market is attributed to increased inflation concerns following recent economic data. As a reminder, the University of Michigan consumer confidence index fell from 77.2 in April to 67.4 in May, marking a six-month low and a result below expectations.
Furthermore, inflation expectations for the year ahead jumped to 3.5%, hitting a six-month high, while the five-year outlook reached 3.1%. In the meantime, Federal Reserve officials cautious remarks further fueled investor anxiety.
As CoinGape Media reported earlier, the Fed’s Lorie Logan highlighted significant upside inflation risks, arguing for flexible policy and ruling out immediate rate cuts. At the same time, Fed Governor Bowman has emphasized the need for lasting political stability.
These developments have left investors worried about the economic outlook, causing a slowdown in the crypto market as they seek clarity amid an uncertain financial backdrop.
Read also: Dogecoin (DOGE) Price eyes ‘Golden Cross’, upcoming mega rally?
Anticipation of next week’s economic data
Investors are preparing for next week’s economic data release, causing a pause in the crypto market today. As recent gloomy economic indicators impact sentiments, anticipation looms over the US Producer Price Index (PPI) and PPI core data to be released on Tuesday, May 14, alongside the President’s speech. Fed Chairman Jerome Powell.
Following this, attention is now focused on United States Consumer Price Index (CPI) and core CPI data, as well as U.S. retail sales data, scheduled for release on Wednesday, May 15. These crucial economic figures notably carry significant weight for investors in the crypto market, offering insight into the current economic landscape and inflationary pressures.
Meanwhile, as expectations build, market participants are exercising caution, leading to a temporary slowdown in the crypto market as they wait for crucial indicators to guide their future investment strategies.
A Closer Look at Market Trends
Recent discussions about the crypto market decline have been further intensified by Santiment’s latest report. In a recent X article, Santiment said this downtrend coincides with a worrying lack of enthusiasm among traders to profit from the dip through the “buy the dip” strategy.
At the same time, the report suggests that the prevailing sentiment among traders indicates a lack of confidence, signaling that the cryptocurrency’s price could be near a bottom. This hesitation to buy during the dip reflects a broader sense of uncertainty among investors, contributing to downward pressure on prices across the market.
Source: Santiment,
On the other hand, CoinGlass reported a significant increase in cryptocurrency liquidations, with 58,000 traders facing liquidation, totaling $156.53 million over the past 24 hours. Notably, the largest liquidation took place on Binance, involving the BTCUSDT pair, worth $3.56 million.
Prices and performance of cryptocurrencies
The global crypto market fell 3.42% to $2.26 trillion at the time of writing, indicating the bearish sentiment hovering over the market. At the same time, the Bitcoin Price slipped 3.26% and traded at $61,033.64, while the Ethereum Price plunged 4.00% to $2,922.99.
Likewise, the Solana Price noted a 5.65% decline to $145.72, while the XRP Price fell 2.31% to $0.5058. The scenario in the piece of money The sector was also bearish amid the widespread market downturn. The main coin, Dogecoin Price fell 5.15% to $0.1445, while the Shiba Inu Price decreased by 3.80% to $0.00002262.
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