Why is the Crypto Market Down Today?

The crypto market witnessed a substantial downturn on Thursday, April 25, 2024, with the global crypto market cap plummeting by 4.30% to $2.36T, according to data from CoinMarketCap. This decline was accompanied by notable dips in major crypto assets, raising concerns among investors and market analysts.

Major Cryptocurrencies Face Sharp Declines

Consequently, Bitcoin, the world’s largest cryptocurrency by market capitalization, experienced a 4.08% decrease, with its price dropping to $63,836.89. Ethereum, the second-largest cryptocurrency, followed suit with a 3.85% decline, trading at $3,134.27. Moreover, Solana, one of the prominent altcoins, suffered a significant 7.10% dip, with its price currently standing at $146.13.

Impact of Misinformation on Market Sentiment

However, the market downturn can be partially attributed to the recent clarification from BlackRock, a leading asset management firm. As reported earlier by Captain Altcoin, there was a misinterpretation of news regarding BlackRock’s plans to tokenize its funds on the Hedera network. BlackRock has since clarified that it has no commercial relationship with Hedera and does not intend to tokenize its funds on the network.

Additionally, data from Spot On Chain, a crypto analytics platform, revealed a negative net inflow of $121M for Bitcoin ETFs on April 24, 2024. Notably, the BlackRock iShares Bitcoin Trust (IBIT) had zero inflows, ending its streak of 72 consecutive trading days with inflows. Furthermore, the single-day outflow from the Grayscale Bitcoin Trust (GBTC) rose to $130.4M, 1.95 times higher than the previous trading day.

Notable Trading Activity

In addition to these factors, Lookonchain (@lookonchain) reported that a trader deposited 395 BTC ($26.3 million) to Binance for sale before the Bitcoin price dropped four hours ago. This trader had bought 536 BTC ($35.15 million) at an average price of $63,729 between April 5 and April 18, and then sold it at $66,530 over the last two days, making a profit of approximately $1.5 million.

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Ethereum Transaction Fees

Consequently, the low trading volume and reduced demand for cryptocurrencies have contributed to the overall market downturn. Additionally, the transaction fees on the Ethereum network are currently relatively low, ranging from $5 to $10. During periods of high volume and bull runs, these fees can soar to over $200, reflecting the current market conditions.

The average transaction fee for Ethereum has historically been volatile, with several peaks and troughs observed over time. While the fee reached a significant peak of approximately $30 in mid-February, indicating increased demand or network congestion, it has since dropped to nearly $5 during periods of lower activity.

Source: BitInfoCharts

Overall, the combination of market sentiment, regulatory concerns, and trading dynamics has contributed to the crypto market’s decline today.

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Samuel Munene
Samuel Munene

Samuel is a vesatile and seasoned content editor with a sharp eye for detail and a passion for writing. Web3 techonology is the future! With massive experience in the publishing industry, I specialize in refining and enhancing written material to ensure clarity, coherence, and engaging narratives.