TL;DR
- The crypto market is experiencing a strong correction, with significant losses in Dogecoin (DOGE), Ethereum (ETH), and Lido DAO (LDO).
- Traders betting on a recovery were the most affected, with losses reaching up to $420 million in BTC, $150 million in ETH, and $30 million in DOGE.
- The downturn is part of a two-week bearish trend, driven by an uncertain economic environment, fears of a recession, and the impact of U.S. trade tariffs.
The crypto market is going through a tough correction. Dogecoin (DOGE), Ethereum (ETH), and Lido DAO (LDO) have lost a significant part of their value.
Bitcoin is facing waves of high volatility, dropping below $78,000, triggering a massive liquidation of long positions. Traders who were betting on a price recovery were the most affected, with losses of up to $420 million in BTC, $150 million in ETH, and $30 million in DOGE.
According to the latest data from CoinMarketCap, Bitcoin (BTC) is hovering around $81,000, showing a daily drop of 2.1%. On the other hand, Ethereum (ETH) is just above $1,900, having lost 4.7% of its value today. As for Dogecoin (DOGE), the daily drop in the meme coin is 2.6%, standing at a value of $0.1610 per token. Meanwhile, Lido DAO (LDO) suffered a 5.2% drop and its value is just over $0.9 per unit.
Why Is the Crypto Market Still Falling?
This price decline is part of a two-week bearish trend, exacerbated by an uncertain economic environment. The lack of clear signals for interest rate cuts by the U.S. Federal Reserve and growing concerns about a potential recession have increased risk in the financial markets. Additionally, fears about upcoming U.S. trade tariffs, set to take effect next month, have intensified negative sentiment.
In the traditional markets, the S&P 500 and the Nasdaq have also fallen, a result of widespread nervousness among investors. The strengthening of the U.S. dollar and an increase in Treasury bond yields further contributed to risk aversion, affecting the demand for risk assets such as cryptocurrencies.
However, despite this negative outlook, some analysts suggest that the Crypto Fear & Greed Index, currently in “extreme fear” territory, could indicate that the markets are close to a capitulation phase. This could pave the way for a short-term rally, although doubts remain regarding the direction the markets will take.
The decline in cryptocurrency values has also affected the futures market, with a 7% drop in open positions for BTC contracts, suggesting forced exits from traders due to margin calls. Despite the current challenges, some factors, such as the position of the dollar and lower bond yields, offer potential hope for dollar-denominated assets, including cryptocurrencies
