Key Notes
- Bitcoin, Ethereum, and many altcoins are seeing sharp declines.
- The global crypto market cap dropped by almost 3%, wiping roughly $140 billion off the market.
- An overbought market, macro events, and a sudden inflow of liquidity into speculative assets are driving the selling pressure.
The hopes of Bitcoin (BTC) hitting $130,000 and Ethereum (ETH) breaking its 2021 peak are under pressure with the bearish momentum from multiple catalysts.
BTC reached an all-time high of $124,457 on Aug. 14 as the crypto market cap reached $4.2 trillion.
The leading altcoin, ETH, was just $104 away from hitting a new ATH on the same day.
The $547 million weekly inflow into US-based spot BTC exchange-traded funds was a notable catalyst, but what drove the market was the record $2.85 billion net inflow into the spot ETH ETF.
Moreover, the US Consumer Price Index report added to the positive momentum as the monthly inflation cooled down from 0.3% to 0.2% while the year-over-year rate remained at 2.7% for the second consecutive month.
What does all this mean? The fear of missing out, which is very common in the crypto market, triggered high volatility. CoinMarketCap data shows that Aug. 14 saw a sudden increase in positive sentiment, and the market entered the greed zone.
However, as FOMO kicked out, the global crypto market cap took a 3% decline to $3.88 trillion, according to CMC data.
What’s Going On with Bitcoin and Ethereum
BTC is down to $115,300, and ETH is wandering below $4,300. XRP (XRP) also lost the $3 price point.
The crypto market recorded over $530 million in liquidations over the past 24 hours, led by ETH’s $210 million figure, according to Coinglass data. Increasing liquidations show that the market was overbought, and even the slightest decline in prices triggered massive wipeouts.
Another reason for the high volatility, especially among the low-cap altcoins, is the sudden rise in decentralized finance’s total value locked. The TVL rose from $129 billion on Aug. 3 to nearly $160 billion on Aug. 14.
Main Events This Week
Last but not least, this week is marked by highly impactful macroeconomic events that will not only put pressure on crypto but also on the broader financial sector.
US President Donald Trump will meet with Ukrainian President Volodymyr Zelenskyy today, Aug. 18. The Federal Open Market Committee Minutes are scheduled for Aug. 20, and Fed chair Jerome Powell will make a speech on Aug. 22.
Moreover, the US Initial Jobless Claims report is set to be released on Aug. 21.
next
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
Wahid has been analyzing and reporting on the latest trends in the decentralized ecosystem since 2019. He has over 4,000 articles to his name and his work has been featured on some of the leading outlets including Yahoo Finance, Investing.com, Cointelegraph, and Benzinga. Other than reporting, Wahid likes to connect the dots between DeFi and macro on his newsletter, On-chain Monk.
Wahid Pessarlay on X
Source: https://www.coinspeaker.com/why-is-crypto-down-today-top-3-bearish-drivers/