The cryptocurrency market has taken several hits this past week, culminating in short-term panic trading entering the weekend. Price charts indicate that top crypto assets closed the week in decline, following massive outflows that occurred after a short-term midweek correction. Generally, the wider market declined 3.3% with signs of more negative movement,
XRP Leads Coin Setback
The bearish market outlook led to sharp liquidations today, with the numbers spiking over $500 million. This further dampened sentiment, triggering another round of outflows among retail traders. Bitcoin dropped below $109,000, trading at $108,300, and dragged the wider market down alongside crypto stocks. These are assets whose value is linked to the price of Bitcoin or blockchain developments.
This comes on the back of the new United States inflation data and other macro factors. Before the announcement, shares dipped as stakeholders generally expected a negative report. According to the release, core inflation stands at 2.9%, up 0.1% from June, with consumers pointing to tariff policies.
Meanwhile, several analysts believe a cut is in the works following a speech by Fed governor Christopher Waller if labor market data weakens.
“The Fed opened the door to rate cuts, but the size of that opening is going to depend on whether labor-market weakness continues to look like a bigger risk than rising inflation,” said Ellen Zentner, chief economic strategist at Morgan Stanley Wealth Management. Today’s in-line PCE Price Index will keep the focus on the jobs market. For now, the odds still favor a September cut.”
Ethereum’s drop after a major rally above $4,800 had an impact on decentralized finance and altcoins. The asset plunged 3% today, erasing gains from its new all-time high. CoinGlass data shows a total of $535 million in liquidations, with a significant portion recorded in altcoins. XRP recorded the largest price dip, falling nearly 6% before experiencing a slight recovery.
The institutional favorite asset trades at $2.77, a 9% decline across the week, wiping out gains recorded the previous month. XRP’s massive volatility arises as retail traders seek to take profits, prompting whales to establish new positions. Meanwhile, whales continue to back the asset due to anticipated spot ETFs in the United States. These products are expected to generate significant inflows to altcoins, building on the success of Bitcoin products since January 2024.
Solana followed the same path of outflows, plunging 4% over the last 24 hours. However, SOL showed positive signs with peaks across the week based on publicly listed firms adopting a treasury strategy.
