On Thursday, the cryptocurrency market experienced a broad sell-off, with notable coins like DOGE, SHIB, AVAX, and LINK plummeting by over 4% within less than an hour. This downturn occurred as investors awaited a U.S. regulatory decision regarding spot ether (ETH) exchange-traded funds. Bitcoin (BTC) fell below $68,000 in early U.S. trading, down from around $70,000 earlier in the day, marking an almost 3% drop over 24 hours. ETH, which had surged to over $3,900 early Thursday, its highest since mid-March, also declined to near $3,700 but remained positive over the past 24 hours.
The sell-off affected the wider digital asset market, with the CoinDesk 20 Index (CD20) falling by more than 2%. Major altcoins such as Dogecoin (DOGE), Avalanche’s native token (AVAX), Shiba Inu (SHIB), and Chainlink (LINK) all saw declines exceeding 4% in under an hour, according to CoinDesk data.
This downturn began earlier but was likely exacerbated by a new S&P Purchasing Managers’ Index report indicating a robust U.S. economy, with the fastest output growth in two years. This report spurred a rise in the dollar as traders adjusted their expectations regarding potential interest-rate cuts. Consequently, risk assets, including cryptocurrencies, saw increased selling pressure. Concurrently, the broad-market equity index S&P 500 dropped 0.6% from its opening price.
Adding to the market’s volatility, a significant sell-off of ETH by the trading firm Symbolic Capital Partner might have contributed to the decline. Blockchain data revealed that the firm offloaded 6,968 ETH worth $27.4 million within a minute. Such large sell orders can create a ripple effect, triggering further sell-offs as market participants react to the sudden increase in supply.
Overall, the combination of regulatory uncertainty, economic reports, and large sell orders created a volatile environment for the cryptocurrency market, leading to significant declines in both major and altcoins. Investors remain cautious, closely monitoring regulatory developments and economic indicators that could impact market dynamics in the near term. This heightened sensitivity to regulatory and economic news underscores the fragility of the current market sentiment and the potential for rapid price movements based on new information.
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