Selling Pressure Hits Bitcoin, Altcoins Following Large Rally
Cryptocurrencies declined across the board on Monday, as the market returned to a defensive posture following a $38 billion inflow over the past six days. Losses affected all major assets but were largely concentrated in altcoins and tokens.
From a peak of around $230 billion on Friday, the cryptocurrency market cap has fallen back to $218.4 billion. The brisk selloff began around 00:00 UTC on Monday; the market would go on to lose roughly $8 billion over the span of six hours.
Trading volumes have held steady over the last 24 hours with $13.7 billion transacted on virtual currency exchanges.
All major assets were down on Monday, with XRP and Stellar XLM each declining more than 11%. Both currencies were the top performers last week. XRP is currently trading at $0.517 and XLM is sitting at $0.2556.
Ethereum slipped 5.1% to $232. Bitcoin cash was down 7.3% at 464. EOS, which was briefly overtaken by Stellar in the market cap rankings, declined 6.6% to $5.67.
Losses in bitcoin, the largest cryptocurrency by market cap, were more contained. BTC is down 2.1% over 24 hours to $6,607. Bitcoin’s price crossed the 50-day moving average on Friday and is currently testing that key level.
A pullback was expected for the leading altcoins after demonstrating spectacular growth over a short period. XRP posted a three-fold increase in price last week while Stellar XLM added a third to its value in roughly the same period. Cardano was also among the top performers a ADA began its long recovery from a 96% retracement.
Fundamentals were a major catalyst behind last week’s rally but appear to be absent from the recent reversal, reinforcing the view that technical re-positioning was largely responsible. Sharp corrections are common for cryptocurrencies after a large run-up in prices.
With the pullback, bitcoin’s share of the overall market has returned above 52%. Bitcoin’s dominance rate approached six-week lows on Sunday as altcoins and tokens outpaced the leading digital currency.
BTC trade volumes are holding above $4 billion, a figure that is generally consistent with rising prices. Bitcoin’s price action this week could be influenced by expiring CME futures contracts. The September futures contract is set to expire on Friday.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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