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Cryptocurrency market experiences downturn as Bitcoin and Ethereum see significant drops over the last week.
Crypto traders are adopting a bearish outlook as Bitcoin and Ethereum have struggled to sustain their recent gains, based on various on-chain indicators.
As per CryptoSlate data, Bitcoin has decreased by nearly 7% over the last week, trading at $113,479 at the time of reporting. Ethereum has seen an even steeper decline, dropping 10% in the same period and settling around $4,269.
This downturn is not confined to the two leading digital currencies. Other cryptocurrencies within the top 10 by market capitalization, such as Solana, XRP, Dogecoin, and Cardano, have also recorded double-digit losses over the past week.
The abrupt shift signifies a notable departure from the bullish sentiment that prevailed among investors just weeks earlier. Data from Coinperps indicates that this has led to the Crypto Fear & Greed Index falling to 52, marking its lowest point since June.
Further data from Santiment on August 20 supports the lackluster market sentiment. The firm highlighted that social media discussions surrounding Bitcoin have reached their lowest levels since June 22, when geopolitical tensions prompted panic selling.
It added:
“Retail traders have done a complete 180 after Bitcoin has failed to rally and dipped below $113,000.”
Bitcoin Market Sentiment (Source: Santiment)
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In the meantime, the bearish sentiment seems to have affected trading activities.
Data from CoinGlass reveals that over 50% of Bitcoin positions are currently short, indicating that the majority of traders anticipate further price drops. Conversely, 48% of traders have kept active long positions over the past day.
Indeed, crypto speculators on prediction platforms like Polymarket are increasingly assigning a 60% likelihood that Bitcoin could decline to $111,000 or lower.
Crypto research platform Kronos suggested that the market unease is linked to apprehensions regarding the Federal Reserve’s possible rate cut in September.
According to the firm:
“Powell’s Jackson Hole address remains the key potential pivot [for the crypto market]: dovish language may spark a rebound, hawkish tones could trigger deeper corrections.”
Significantly, the rate markets indicate a strong likelihood of easing, with CME FedWatch data showing the probability at 81%.
The post Bearish wave hits crypto as Bitcoin and Ethereum faced sharp declines over past week appeared first on CryptoSlate.
