(Bloomberg) — Losses are piling up in the cryptocurrency market after its second-worst weekly decline in 2024, a reflection of slowing demand for bitcoin exchange-traded funds and uncertainty over monetary policy.
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A measure of the 100 largest digital assets fell about 5% in the seven days through Sunday, the worst such decline since April, data compiled by Bloomberg showed.
Market leader Bitcoin fell nearly 2% to trade at $62,275 as of 7:05 a.m. Monday in London, its lowest level in more than a month, hit by a six-day series of outflows from U.S. currency ETFs. Featured.
The cracks in cryptocurrencies come amid doubts about the Federal Reserve’s scope to quickly cut interest rates from their highest level in two decades. For some analysts, the decline in digital assets is a warning sign of broader risk appetite.
Current cryptocurrency market dynamics “are characterized by low volatility, soft volumes, and unbalanced order books when prices start moving to the edges of their range,” David Lawant, head of research at FalconX, wrote in a note.
The declines in some corners are especially noticeable: the streak of weekly declines for both Ethereum and Solana is the longest since last year and 2022, respectively.
This is even as fund companies prepare to launch the first US ETFs that invest directly in Ethereum, the second cryptocurrency asset. Meanwhile, Solana has recently been a favorite of a variety of digital asset hedge funds.
Bitcoin reached a record high of $73,798 in March, but is trailing traditional assets such as stocks, bonds and gold this quarter. The 200-day moving average at around $57,500 is now in focus as a potential support area for the price, according to market analyst at IG Australia Pty, Tony Sycamore.
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