Dogecoin, Solana Lead Crypto Majors Plunge as Bitcoin Falls Below $66K

As an experienced analyst, I believe that the significant declines in major tokens, including Bitcoin and Ether, during Asian trading hours on Tuesday were driven primarily by profit-taking and ongoing net outflows from U.S.-listed Bitcoin ETFs. These factors have negatively impacted bullish sentiment in the market.

In Asian markets on Tuesday, significant Bitcoin tokens were sold off due to persistent profit-taking and another round of net withdrawals from U.S.-based Bitcoin ETFs on Monday. This situation has been weighing down optimistic feelings towards the cryptocurrency.

The widely followed CoinDesk 20 Index, which comprises the largest non-stablecoin tokens, has declined by 4.2%.

As a crypto investor, I’ve noticed that Bitcoin took a dip last week, falling below the $65,000 threshold for the first time in a month. This downturn was fueled by significant net outflows from Bitcoin ETFs, which reached over $500 million. Additionally, the Federal Reserve sent a strong signal that they will only make one interest rate cut in 2024. These developments have contributed to the current market volatility.

Neil Roarty, an analyst at Stocklytics, mentioned in an email to CoinDesk that other factors haven’t significantly influenced the situation. However, Emmanuel Macron’s unexpected announcement of a snap election in France added political uncertainty, causing traders to abandon the euro and bolster the US dollar instead.

As an analyst, I’ve observed that a robust US dollar typically puts a damper on Bitcoin’s price movement. To reach the $70,000 milestone, a significantly lower benchmark for interest rates and a weaker greenback would be required.

In my analysis as an Ethereum observer, I noted that the cryptocurrency experienced a gain of over 6% following optimistic news about the potential ETF approval. However, a decline of almost 1.5% since the beginning of Monday raised concerns regarding the short-term prospects for altcoins, including Ethereum.

As a researcher, I would express it this way: “On weekdays, the heightened market liquidity could potentially favor bearish sentiments over bullish ones, boosting selling pressure.”