Cryptocurrencies experienced a downward trend on Thursday, with Bitcoin (BTC) falling below the $25,000 mark and XRP and Cardano’s ada (ADA) extending their 24-hour declines by up to 7.4%. According to data from CoinGecko, the total market capitalization suffered a 3.8% loss within the past 24 hours.
Market analysts are suggesting that further declines may be on the horizon, with Bitcoin potentially reaching as low as $23,500 based on price-chart analysis. Alex Kuptsikevich, a senior market analyst at trading firm FxPro, explained in an email to CoinDesk that Bitcoin has retreated to local resistance levels observed between August of last year and February of this year. He noted that while the bulls may attempt to stabilize the sell-off near this level, the current decline is still within the descending channel that has been in place since April.
A descending channel signifies a bearish trend in an asset, characterised by prices consistently reaching lower highs on short-term time frames. Kuptsikevich also pointed out that more significant support for Bitcoin lies near the 200-day average, currently at $23.6K and showing an upward trajectory.
Cardano’s ada has experienced a drop of over 20% within the past week. This decline follows its inclusion, alongside 12 other tokens, as a security in a lawsuit filed by the U.S. Securities and Exchange Commission (SEC) against leading crypto exchanges Binance and Coinbase.
Similarly, XRP has erased all gains from a surge earlier in the week. This drop occurred as the market absorbed the information from the “Hinman emails,” which were disclosed as part of a Ripple Labs filing on Tuesday. The emails, written by William Hinman, former director of the SEC’s Division of Corporation Finance, were made public in connection with the SEC’s ongoing lawsuit against Ripple.
Ether (ETH), the second-largest cryptocurrency by market capitalisation, experienced a 6.4% drop within the 24-hour period. Futures contracts tied to Ether saw the highest liquidations among major cryptocurrencies, amounting to $57 million out of a total of $143 million across all crypto-tracked futures.
The market sentiment has been further affected by general bearish sentiment and an unusual surge in the sale of Tether (USDT) stablecoin on the decentralised finance (DeFi) protocol Curve Finance. Balances of USDT on Curve’s popular 3pool, a stablecoin swapping pool comprising USDT, USDC, and DAI, surged to over 72% on Thursday. This suggests that traders exchanged tens of millions of USDT in favour of USD Coin (USDC) and Dai (DAI).
The combination of Bitcoin’s decline, regulatory challenges faced by prominent cryptocurrencies, and the abnormal USDT sales has created an atmosphere of uncertainty in the cryptocurrency market. Traders and investors are closely monitoring these developments, which could impact their positioning and strategies as they navigate the current market landscape.
