The mood has soured quickly after a string of record highs, with traders forced to reckon with the macro backdrop once again.
Bitcoin and ether (ETH) traders booked profits over the past 24 hours after the assets hit record highs, while macro headwinds and elevated leverage added pressure across major tokens.
Bitcoin fell back to $113,500, down more than 1.5% on the day. Some analysts warned of the fragility of the market structure, with bitcoin slipping below key trendlines that had supported its rally.
“Bitcoin fell to $114,700, rolling back to levels seen two weeks ago and below the medium-term trend line, which is a 50-day moving average. This dynamic reinforces fears of a deeper correction, which could affect the entire crypto market, potentially triggering a deeper correction to $100,000, near the 200-day MA,” said Alex Kuptsikevich, chief market analyst at FxPro.
“The cryptocurrency market cap fell by another 0.4% to $3.87 trillion. The market is plunging below the former resistance level, raising speculators' fears of a possible major correction towards $3.6 trillion,” he added.
Ether slid 1.8% to $4,159, down over 12% from its recent peak. The native token of Ethereum is retesting the $4,100 support level that had capped its rallies since March.
Sour mood sweeps the market
The mood in the crypto market has soured quickly after a string of record highs, with traders forced to reckon with the macro backdrop once again. U.S. inflation data surprised to the upside, cooling expectations for rapid rate cuts and prompting profit-taking across short-term accounts.
“Bitcoin remains in minor correction mode since posting its latest record high in the previous week,” said Joel Kruger, market strategist at LMAX Group, said in an email.
“Sentiment has been mostly steered lower by hotter-than-expected U.S. inflation data, which dampened expectations for near-term rate cuts from the Fed.”
The retracement hasn’t spared ether, which mirrored bitcoin’s drop as leveraged longs unwound. Still, flows into ETH products remain robust, giving some traders confidence that the move is temporary.
“Ethereum has mirrored Bitcoin’s retreat, as traders book profits following recent strong gains. Still, broader institutional interest remains resilient - evidenced by robust ETF flows and growing treasury allocations to ETH - which keeps the medium-term outlook constructive,” Kruger added.
