Bitcoin Drops to $65,000 as Solana, XRP, Dogecoin Decline 6%
Bitcoin’s recent attempts to regain its position above $70,000 have faltered, as the cryptocurrency fell to $65,735 in early Asian trading on Saturday. This represents a 3% drop in just one day and a weekly decline of 2.8%. Following a brief rally earlier in the week, Bitcoin has given back more than half its gains due to deteriorating market sentiment.
Declining Altcoins Amid Market Struggles
Altcoins faced even steeper declines with notable cryptocurrencies suffering significant losses:
- Solana: down 6.7%
- Ether: down 6.2%
- Dogecoin: down 5.1%
- XRP: down 4%
These downturns have reversed the week’s earlier signs of altcoin strength, with most major tokens experiencing red weekly performance. BNB remained relatively stable, declining by only 2.5%.
Market Influences and Institutional Flows
The triggers for this cryptocurrency downturn were reminiscent of earlier market patterns. On Friday, the U.S. equity market faced declines, with the S&P 500 closing down 0.4%, the Nasdaq 100 dropping 0.3%, and the Dow falling by 1.1%. Analyst sentiments were further rattled by a notable 0.5% rise in producer prices, raising concerns about persistent inflation and its effects on Federal Reserve rate cuts.
Notably, despite Bitcoin’s struggles, there was positive news regarding institutional investments. U.S. spot Bitcoin ETFs managed to attract $1.1 billion in three days, indicating strong capital inflow, the strongest in several months. Yet, this has not been enough to counteract the prevailing macroeconomic pressures.
The Broader Implications for Cryptocurrency
Dom Harz, co-founder of a Bitcoin finance firm, emphasized that fluctuations are common and not surprising to seasoned investors. “Bitcoin’s volatility is well-known,” he stated. “What’s different now is the nature of the capital inflow into this emerging asset class.”
However, market analysts have raised alarms about the decreasing USDT stablecoin reserves on exchanges, which have dropped from $60 billion to $51.1 billion over the last two months. Should reserves fall below $50 billion, experts warn of a potential mass sell-off.
Meanwhile, large Ethereum holders are increasingly selling at a loss. The company DATZilla has shifted its focus from Ethereum accumulation to developing tokenized real-world assets, indicating a broader trend within the industry.
Looking Ahead: Market Trends and Predictions
Bitcoin currently trades within the $60,000 to $70,000 range, a territory it has been familiar with since the significant drop in February. The recent peak of this range has proven resistant. As March approaches, the pressing question looms: Can Bitcoin maintain its ground, or is further decline on the horizon?
