Crypto Market Downturn- Dogecoin and XRP Plunge Amid Market Correction
Crypto Market Downturn– In a broader market decline, major tokens such as Dogecoin (DOGE) and XRP (XRP) faced significant losses as traders cashed in on earlier gains. This downturn came after a week of positive momentum, particularly for U.S.-listed Bitcoin (BTC) exchange-traded funds (ETFs), which saw a break in their seven-day inflow streak. DOGE dropped 5%, while XRP fell 4%, as Bitcoin struggled to maintain its rally from Monday, which had seen prices approach $70,000.
The Impact of Market Sentiment
Despite the recent pullback, the CoinDesk 20 (CD20) index, which tracks the largest cryptocurrencies by market capitalization, fell nearly 2%. Bitcoin itself experienced a 1% loss. Traders remain optimistic, however, projecting a possible surge to $80,000 in the coming weeks as the U.S. elections approach, regardless of the eventual outcome.
In the mid-cap and low-cap segments, market action remained relatively flat. However, memecoin Bonk (BONK) and governance token APE saw declines of over 7%, leading the losses among smaller tokens. Market analysts highlighted a critical resistance level for Bitcoin and a slowdown in stablecoin issuances as factors contributing to the lack of upward momentum in Bitcoin and other cryptocurrencies.
Resistance Levels and Stablecoin Dynamics
The main reason for the overall subsidence in the crypto market appears to be Bitcoin, which bears defended against an assault on the $70K level, stated Alex Kuptsikevich, a senior market analyst at FxPro, in an email to CoinDesk. He elaborated that selling intensified at the $69,500 mark early on Monday, subsequently dropping the price to $66,500 by Tuesday morning.
Kuptsikevich also noted that stablecoin volume has not seen an uptick since late September, indicating a potential halt in the broader cryptocurrency market’s growth. Stablecoins typically act as liquidity for quick purchases of preferred coins, and the previous growth momentum from August to September had pushed the overall crypto market capitalization up from lower levels.
Bitcoin ETFs Experience Outflows
On Tuesday, Bitcoin ETFs collectively lost a net $80 million, with Ark Invest’s ARKB seeing a substantial outflow of $134 million—the largest figure recorded for the product. Conversely, BlackRock’s IBIT led inflows with $42 million, while Fidelity’s FBTC and VanEck’s HODL attracted $8 million and $3 million, respectively.
Additionally, BlackRock’s ether ETF recorded inflows of $11 million on Tuesday, while other products exhibited no significant inflow or outflow activity. This data illustrates the shifting dynamics within the cryptocurrency market and the varying fortunes of different tokens and investment products.
As traders navigate these turbulent waters, the outlook remains cautiously optimistic, especially with the U.S. elections on the horizon.
FAQs
Why did Dogecoin and XRP experience significant losses recently?
Dogecoin (DOGE) dropped by 5% and XRP fell by 4% due to a broader market downturn as traders took profits after a recent price increase. This decline was also influenced by Bitcoin’s failure to maintain its rally near $70,000, leading to a cautious sentiment in the market.
How are Bitcoin ETFs affecting the cryptocurrency market?
Bitcoin exchange-traded funds (ETFs) saw a net outflow of $80 million, with notable withdrawals from Ark Invest’s ARKB product. This trend indicates a cooling interest in Bitcoin ETFs, which can impact overall market liquidity and sentiment. The pause in stablecoin issuances also contributed to a slower uptrend in Bitcoin and other cryptocurrencies, as stablecoins are crucial for quick transactions in the crypto market.
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