Important Factors That Have Led to Today’s Decline in the Crypto Market
The cryptocurrency market experienced a decline in the past 24 hours, with Solana (SOL), Cardano (ADA), and Polkadot (DOT) leading the way. Despite the increased on-chain activity, the bullish momentum that started at the beginning of the year is gradually diminishing.
According to the latest market data, the total crypto market cap decreased by approximately 1 percent in the past 24 hours, reaching around $1.67 trillion. Similarly, Bitcoin’s open interest (OI) has declined alongside the underlying prices over the past week.
There are several reasons behind the drop in the crypto market:
1. Spot ETF Hype Fading: The hype surrounding the approval of several spot Bitcoin ETFs by the US SEC is slowly dissipating. More crypto investors are preparing for the upcoming halving in April, causing short-term holders and miners to readjust their portfolios after a strong performance in previous months.
2. Regulatory Uncertainties in the United States: The SEC vs Coinbase Global litigations have left the crypto market uncertain. Despite both parties agreeing that crypto assets are not securities, the SEC attorneys disagreed with Coinbase lawyers on the classification of crypto transactions as investment contracts. Judge Katherine Polk Failla did not provide any hints regarding the possible outcome, and a ruling is expected in the coming weeks due to the lack of clear crypto regulatory frameworks from the US Congress.
3. Crypto Whales Selling Pressure: Recent on-chain data analysis has shown increased activity, with large transactions moving from various wallet addresses to exchanges like Coinbase and Binance. Furthermore, market intelligence platform Santiment’s data analysis reveals that a significant portion of Bitcoin, Ethereum, and XRP’s total supply is currently in profit, which often leads to corrections in the market.
In conclusion, the crypto market has experienced a decline in the past 24 hours, influenced by factors such as fading spot ETF hype, regulatory uncertainties in the United States, and selling pressure from crypto whales. The market’s bullish momentum has decreased, despite the elevated on-chain activity observed recently.