The cryptocurrency market continued its downward trajectory as Bitcoin struggles to maintain above the $110,000 mark. Analysts are cautioning that further declines could be on the horizon. As of September 26, Bitcoin (BTC) is trading at $109,750, representing a slight dip of approximately 1% within the day. Ethereum (ETH), while stable today, fell below the $4,000 threshold just yesterday, showcasing the overall market’s volatility.
Many of the top 20 cryptocurrencies by market capitalization have experienced significant declines this week, with several reporting double-digit losses. Among the major cryptocurrencies, only TRON (TRX) saw a slight increase today, climbing 1% to a current price of $0.335. In sharp contrast, Binance Coin (BNB) experienced the most pronounced decline, plummeting by 4% over the last 24 hours to $951. This drop comes on the heels of a new all-time high of $1,079 earlier this week amidst increased activity on its blockchain network.
Solana (SOL) also faced challenges, falling 1.8% in today’s trading to $197, resulting in a weekly loss of over 18%. XRP followed closely, down 2.4% to trade at $2.76.
Despite the overall market’s struggles, there were notable exceptions among lesser-known cryptocurrencies. Plasma’s XPL, which recently launched its protocol’s mainnet beta, surged by an impressive 65% over the last 24 hours, now trading above $1.20. In contrast, the digital asset Story (IP) witnessed a continued sell-off, with an additional 10% drop today following a significant downturn the previous day.
According to a research report from Glassnode, Bitcoin is now exhibiting signs of ‘exhaustion’ following a brief rally after the recent Federal Reserve meeting. Analysts highlighted a critical cost basis for short-term holders at $111,000, marking it as essential to maintain; otherwise, the risk of a deeper market correction increases. They observed that long-term holders have realized around 3.4 million BTC in profits, indicating a substantial distribution of assets and the maturity of the recent bullish trend.
The potential for market cooling is further compounded by a wave of liquidations and outflows from cryptocurrency exchange-traded funds (ETFs). Data from Coinglass revealed that over the past 24 hours, more than $869 million in leveraged positions were liquidated, with Ethereum leading the pack at nearly $280 million, followed closely by Bitcoin at $223 million. The new asset XPL also experienced liquidations amounting to $69 million as it faced price pressure after being listed on centralized exchanges.
Additionally, spot ETH ETFs and Bitcoin ETFs recorded significant outflows, with $251 million and $258 million exiting over the past day, respectively. These outflows mark the largest daily reduction since early September, highlighting an erosion of investor confidence following the recent price movements.
This downturn coincided with the release of new economic data from the U.S. Bureau of Economic Analysis, particularly regarding the personal consumption expenditures (PCE) price index, which showed core inflation at 2.9%, aligning with market expectations. These indicators of economic growth and labor conditions have led to shifts in market sentiment, with rising rates and a strengthened dollar potentially tightening liquidity, contributing to the ongoing pullback in crypto markets, as noted by analysts at Coinbase Institutional.
