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Why is the cryptocurrency market down today?

Why is the cryptocurrency market down today?

As the period of stagnation among most digital assets continues, which has seen all of the major cryptocurrencies, including Bitcoin (BTC) and Ethereum (ETH), continuously decline, the cryptocurrency sector has lost more than $17 billion in its market capitalization in just the last 24 hours.

Specifically, its market cap has declined from $1.17 trillion 24 hours ago to $1.15 trillion at press time, which represents a 1.63% drop in the past day, according to the latest data retrieved by Finbold from the crypto monitoring platform CoinMarketCap on August 16.

Total crypto market cap 24-hour chart. Source: CoinMarketCap

As it happens, the decline was the sharpest among altcoins, with XRP losing over $1 billion in market cap after its price declined more than 4% over the past day, nearly 7% on its weekly chart, and close to 20% across the previous month, currently standing at $0.5996.

XRP 24-day price chart. Source: Finbold

Why the decline?

Notably, the current sell-off coincides with Binance, one of the largest crypto exchanges in the world, shutting down its regulated payment arm Binance Connect, as the crypto trading platform’s spokesperson told crypto news platform Cointelegraph, according to a report on August 16.

Furthermore, GSR, a market maker and investment firm that has been active in the crypto sector for ten years, had five top-level employees leave the company since late last year, including chief financial officer Jonathan Hugh, who was the most recent among the high profile departures.

On top of that, crypto analytics platform Glassnode earlier observed a period of “extreme apathy and exhaustion” in the Bitcoin market, “with volatility measures and several key on-chain indicators reaching all-time-low reading.” As the company’s note reads:

“The digital asset market continues trading within a historically low volatility regime, with several metrics indicating extreme apathy and exhaustion has been reached in the $29,000 to $30,000 range. (…) A very boring, choppy, sideways market may remain.”

Indeed, Bitcoin remains below the psychologically important $30,000 price level, having declined 0.72% in the last 24 hours, 2.06% across the previous seven days, and 3.39% on its monthly chart, as its price stands at $29,164 at the time of publication.

Bitcoin 24-hour price chart. Source: Finbold

All things considered, the current period seems to be a very quiet one, but the crypto market has demonstrated time and time again that it can change rapidly, so the present situation might as well be a calm before the storm in either direction.

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