The crypto market today is experiencing significant turbulence, with major cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH) facing notable declines. This downturn has sparked widespread concern among investors, with many wondering what’s driving this bearish trend. Thus, we have listed the key factors contributing to the market’s current state, focusing on Bitcoin, Ethereum, and altcoins.
Bitcoin Miners Under Pressure Amid Declining Crypto Market Today
Bitcoin, the market leader, is also facing significant headwinds. The revenue per terahash for Bitcoin miners has dropped to a 12-month low of 4 cents, down from over 10 cents earlier in the year. This sharp decline in mining profitability is due to several factors, including the upcoming halving event, low on-chain activity, and increasing network difficulty.
The Halving event in April 2024 reduced the block reward by 50%, putting further pressure on miners. As a result, smaller mining operators are being forced to either shut down or consolidate their operations. This consolidation is likely to lead to a decrease in network decentralization, which could have long-term implications for Bitcoin price.
Also, as the crypto market declined today, FUD grew around Binance’s suspicious transfer of 75,117 BTC worth $4.69 billion. Out of this, the crypto exchange shifted 45,000 BTC to an unknown wallet, sparking speculations. However, it was then clarified that it was an internal transfer.
In addition, long liquidations in the market currently stand at $112.25 million, according to Coinglass. While this figure may not seem overly significant, it reflects the heightened market uncertainty that is contributing to the overall bearish sentiment.
The crypto market today is also reacting to profit-taking behavior. Last week, Bitcoin rallied past $65,000 amid optimism surrounding potential Federal Reserve rate cuts. However, traders have been quick to take profits, leading to the current slump.
Moreover, BTC 6-month Returns By Day chart by Velo Data shows that it tends to experience declines on Tuesdays, while Sundays often see price surges. This “buy the dip on Tuesday, sell on Sunday” pattern may be at play, further contributing to the recent price drop. Furthermore, altcoins generally mimic BTC price trend, which may have led to the latest pullback.
Ethereum’s On-Chain Activity Slumps
Ethereum, the second-largest crypto by market capitalization, has seen a notable decline in its on-chain activity. On August 21, the 7-day moving average (7DMA) of Ethereum’s daily on-chain volume dropped to $2.37 billion, marking a 9-month low. This decline in on-chain volume is significant, as it indicates a reduction in network activity, which often correlates with lower market interest and, consequently, falling prices.
Moreover, Ethereum’s transaction count hit a low of 1.06 million on August 23, coinciding with a 20% drop in ETH’s price. This sharp decline in transaction volume suggests that fewer users are engaging with the network. This further exacerbates bearish sentiment.
Adding to the negative outlook, the Ethereum Foundation recently deposited $100 million worth of ETH to Kraken as it liquidated its holdings for operational purposes. Additionally, a prominent Ethereum whale recently offloaded $24 million worth of ETH, contributing to the downward momentum.
Another critical factor is the outflow from spot Ethereum ETFs. The crypto market today is witnessing continued outflows from Ethereum ETFs, with $13.2 million being withdrawn on Monday. Notably, no new funds have seen any inflows, indicating the lack of investor confidence in Ether funds.
XRP Faces Volatility As Crypto Market Slumps Today
XRP, one of the top altcoins, is also experiencing significant volatility. The legal battle between Ripple and the U.S. Securities and Exchange Commission (SEC) continues to weigh heavily on XRP price. Currently, XRP is trading lower than the $0.60 level amid the SEC’s appeal uncertainty.
Earlier this month, Judge Analisa Torres ordered Ripple to pay a $125 million penalty, which is 94% less than what the SEC had originally demanded. While this ruling was seen as a partial victory for Ripple, the uncertainty surrounding the SEC’s appeal has kept the market on edge.
Toncoin Declines After Telegram CEO’s Arrest
Lastly, Toncoin has been facing a sustained downtrend following the arrest of Telegram CEO Pavel Durov in France. Durov is currently facing 12 criminal charges related to alleged failures in monitoring criminal activities on the Telegram platform. Moreover, the Telegram CEO’s detent until Wednesday.
The legal troubles surrounding Durov have cast a shadow over Toncoin. This led to increased selling pressure as the broader crypto market decline today. TON ecosystem’s Notcoin (NOT) also bore the brunt as NOT price now risks downfall to $0.0005.
Kritika Mehta
Kritika boasts over 2 years of experience in the financial news sector. Currently working as a crypto journalist at Coingape, she has consistently shown a knack for blockchain technology and cryptocurrencies. Kritika combines insightful analysis with a deep understanding of market trends. With a keen interest in technical analysis, she brings a nuanced perspective to her reporting, exploring the intersection of finance, technology, and emerging trends in the crypto space.
Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
