Today’s dramatic drop in cryptocurrency assets results from the macroeconomic environment turning bad. Most asset losses are on their second day, and cryptocurrencies and Bitcoin (BTC) still exhibit negative values. These withdrawals have caused a sharp decline in the market capitalization, liquidations, and decentralized finance (DeFi) data.
The market capitalization of cryptocurrencies is $2.67 trillion as of this writing, down 1% from the previous day. Except for flows into meme coins, overall losses have decreased while outflows from top assets occurred. While there was a minor intraday trade recovery, trading volumes and on-chain activity decreased. Nineteen billion dollars are traded every day at the moment.
Will Digital Assets See a Comeback?
Despite the gloomy prognosis, market analysts predict a comeback, reclaiming lost territory. Both midday trading and inflows into new meme currencies demonstrate this. Top crypto assets are expected to see a comeback as macro fundamentals improve. With the price of Bitcoin falling below $70,000, investors withdrew from digital assets, resulting in sideways trading and liquidations.
Before the most recent decline, bulls had predicted more significant inflows when the asset’s price hit $71,500 last week. According to economists, the U.S. Labor Department’s report has delayed the likelihood of interest rate reduction, so the decline in Bitcoin’s price isn’t the only negative aspect of the market.
Because higher rates will cause investors to withdraw their money from riskier assets, rate reductions are a crucial factor driving inflows into the digital asset market. Bulls anticipate a significant upswing in the market if these feelings turn positive.
Current Market Decline
Massive withdrawals from Bitcoin, altcoins, and meme currencies were observed in the market. With its price at $3,677, Ethereum reported 2% outflows, while Bitcoin losses were cut to 1%. While Toncoin and Cardano had 3% losses, other altcoins like Solana and Ripple saw 4% outflows. Even though newer assets showed gains, popular joke coins like Dogecoin and Shiba Inu saw broader outflows. On June 7, the stock market was severely stifled due to negative sentiments.
