Crypto Market Faces Drastic Sell-Off, Sending Shockwaves Worldwide

You can also read this news on COINTURK NEWS: Crypto Market Faces Drastic Sell-Off, Sending Shockwaves Worldwide

On August 1st, the cryptocurrency market experienced a significant downturn, characterized by a sharp sell-off. This event led to a 2.4% decrease in the total market capitalization, which fell to $3.78 trillion within a 24-hour period. Data from CoinMarketCap showed Bitcoin (BTC) declining by over 2% to $115,957, while Ethereum (ETH) saw a 3.6% drop, settling at $3,717. Concurrently, Solana (SOL) decreased by 4.8%, Cardano (ADA) by 4.89%, Dogecoin (DOGE) by 5.87%, and XRP experienced a loss of approximately 3.7% in value. The Altcoin Season Index plummeted to 35, indicating a shift in market dominance back towards Bitcoin.

The declines in Bitcoin and Ethereum had a pronounced impact on altcoins, resulting in even more substantial losses for these digital currencies. Investors demonstrated a clear move away from higher-risk assets. Solana struggled to maintain its value at $171, while Cardano and Dogecoin relinquished a considerable portion of the gains they had accumulated over the previous five months. XRP's 3.7% decrease, coupled with a reduction in trading volume, reinforced the prevailing cautious sentiment within the market.

Bitcoin’s Price Chart

The decline of CoinMarketCap’s Altcoin Season Index to 35 strongly suggests a consolidation of capital within Bitcoin, which is often perceived as a safe haven during market volatility. The index's drop from 43 the previous week highlights the significant selling pressure that altcoins faced during the specified period.

CoinMarketCap Altcoin Season Index

The market witnessed the liquidation of $631.98 million in long positions in a single day. This occurrence indicates that cryptocurrency investors employing leverage were caught off guard by the sudden market downturn.

The U.S. Federal Reserve's decision to maintain steady interest rates, accompanied by warnings of economic deceleration, contributed to the decline. While earlier indications from the White House regarding clearer SEC regulations had temporarily boosted market sentiment, the Fed's statements dampened risk appetite. As liquidity decreased, cryptocurrencies became a more vulnerable asset class.

Adding to the market's woes, the implementation of tariffs further intensified the selling pressure. The resulting short-term uncertainty prompted crypto investors to reduce their positions. Even Bitcoin, typically viewed as a long-term store of value, was not immune to this trend, leading to more significant losses for altcoins.