In the Asian morning hours, both Bitcoin and Ether faced a decline alongside other top non-stablecoin cryptocurrencies, with Bitcoin briefly slipping below $28,500 and Ether dropping below the significant $1,800 mark. Notably, smaller altcoins including Dogecoin, Solana, and Ripple bore the brunt of the marketโs bearish sentiment.
Bitcoin rose slightly as July 2023 FOMC minutes revealed Federal Reserveโs worry that inflation concerns could persist more than expected, possibly requiring further tightening. The central bank also acknowledged the need to avoid excessive tightening of financial conditions due to associated risks.
Catalyst Behind Crypto Market Decline
The ongoing market decline can be attributed to several factors. While a partial recovery was witnessed, the U.S. stock market struggled to maintain gains, mirroring a global trend. Chinese economic data, climbing bond yields, and elevated valuations contributed to a prevailing sense of uncertainty this week. Despite Chinaโs central bank cutting interest rates, market confidence remained relatively unaffected.
Interestingly, the market downturn closely followed Binanceโs decision to discontinue its buy-and-sell service, Binance Connect. This strategic move, aimed at prioritizing core products and long-term objectives, triggered a broader market selloff. Although this service encompassed only 50 cryptocurrencies, its impact was far-reaching.
According to Coinglass data, extensive sell-offs worth $129 million occurred in a single day, prompting approximately 63,000 traders to rapidly offload their holdings. A notable sale order involving Ethereum (ETH) amounted to $2.34 million. Cryptocurrencies such as Dogecoin, Litecoin, XRP, Solana, and Shiba Inu saw significant rapid selling in the preceding 24 hours.
Market experts like Rekt Capital and Michael van de Poppe anticipate further crypto price dips. Additionally, the rise in Bitcoin dominance, surpassing 50% of the overall crypto market, poses challenges for alternative coins. The dominance shift potentially indicates further setbacks for other altcoins.
