The cryptocurrency market has taken a tumble over the past week, with overall market capitalization dropping by 3.61% according to data from Santiment, an on-chain analytics platform. Bitcoin, the largest cryptocurrency by market cap, has led the downturn, falling to as low as $65,500 today.
Source: Santiment – Start using it today
This decline has dragged most other cryptocurrencies lower as well. Santiment reported that total trading volume across crypto markets is down 18.84% compared to the previous week’s levels.
The current market slump can be attributed to waning momentum for Bitcoin ahead of its next halving event, according to Michaël van de Poppe, a well-known crypto analyst and trader. Bitcoin “halving” refers to the predetermined event when the reward for mining new Bitcoin blocks is cut in half, which occurs roughly every four years to control supply.
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Show more +Van de Poppe stated that “reality starts to kick in as the momentum pre-halving is slowing down on Bitcoin,” noting this is a recurring pattern in previous market cycles. He views the pullback as a buying opportunity, with altcoins (cryptocurrencies other than Bitcoin) down 25-50% against the U.S. dollar and 40-70% against Bitcoin itself from recent highs.
While market downturns can be unnerving for crypto investors, many analysts see the current conditions as temporary, with the next Bitcoin halving expected to drive renewed upside across the crypto market later this year as new supply slows dramatically.
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