The Altcoins market faced a downward trend as the new week commenced, largely influenced by Bitcoin Price plummet since May. This decline in prices was attributed to a range of factors, including external pressures from China and broader economic uncertainties.
Bitcoin Price Modest Uptick Amidst Recent Decline
Bitcoin Price saw a marginal increase of 0.02%, reaching $26,136.36, as reported by Coin Metrics. In the preceding week, Bitcoin experienced an 11% loss due to a sudden and significant drop that began on Wednesday. This decline marked one of the steepest drops for Bitcoin in recent months.
Altcoins Witnessing More Substantial Losses
While Bitcoin’s decline was relatively modest, other cryptocurrencies experienced more pronounced losses. Ether, the native token of the Ethereum network, saw a decrease of 0.18%, settling at $1,674. Altcoins like Ripple’s XRP witnessed a nearly 5% drop, while coins linked to Ethereum competitors such as Solana, Polygon, and Cardano each lost about 3%.
Tokens associated with decentralized finance (DeFi) projects, like Cosmos and Uniswap, also experienced declines of over 3% and 2%, respectively.
External Pressure from China Impacting Market Sentiment
Chris Martin, Amberdata’s Head of Research, highlighted that the primary driver of the recent sell-offs is likely external pressure emanating from China. The role of Asia, particularly Hong Kong and Singapore, in the cryptocurrency space is substantial.
However, with broader economic challenges and a downturn in the region, the expected bullish market sentiment might not materialize as hoped.
Bitcoin and Ether’s Role and Performance
Bitcoin and Ether, often considered stores of value in the crypto market, have not been immune to the recent downturn. They experienced drops of 11.5% and 9.8%, respectively, over the last seven days.
While altcoins tend to exhibit more significant price swings, the increasing involvement of institutions through various investment avenues like spot ETFs and derivatives might eventually lead to reduced volatility in these tokens.
Challenges Faced by Bitcoin in Q3 2023
Bitcoin’s performance had been relatively stagnant during the third quarter, historically considered a weaker period for the cryptocurrency. With a cumulative decline of 14% for the quarter and approximately 10% for august alone, the anticipated positive impact of an approved spot bitcoin exchange-traded fund or clearer crypto-related legislation from Congress did not materialize.
Instead, the focus on real rates by the Federal Reserve and the financial troubles of China’s Evergrande conglomerate contributed to the downward pressure on the crypto market. Despite recent price fluctuations and the significant drop experienced in the preceding week, Bitcoin’s overall performance in 2023 still reflects a year-to-date increase of approximately 57%.
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