LONDON (IT BOLTWISE) – The crypto market is under significant pressure after a crash on October 10 dragged prices lower. Bitcoin saw a 6% decline in the last week and is now below the critical $100,000 mark. This development could lead to further selling pressure and increase fear in the market.
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The crypto market is currently experiencing a period of uncertainty triggered by the recent crash on October 10th. Bitcoin, the leading cryptocurrency, has seen a 6% decline in the last seven days and is now below the psychologically important $100,000 mark. This development has heightened fears that a continued bearish trend could lead to further selling pressure, driving prices further lower.
A look at the broader market shows a mixed picture. While Solana has fallen 20% year to date, Chainlink has actually suffered a decline of 33%. Despite some gains in Bitcoin, XRP and Ethereum, these cryptocurrencies have not outperformed the stock market, which is up 14% over the same period. This suggests that the crypto market is currently facing significant challenges.
Interestingly, October saw the highest weekly inflows into global crypto ETFs, with $5.9 billion in the first week alone. These inflows were primarily driven by Bitcoin and significant allocations to Ethereum. However, these investments have not yet led to a recovery in prices. However, the Federal Reserve’s announcement of ending quantitative tightening on December 1 and cutting interest rates could bring more liquidity to the crypto financial system.
However, analysts warn that increased liquidity does not necessarily lead to higher cryptocurrency prices. While the end of quantitative tightening removes a persistent headwind, the market’s short-term weakness is likely to persist for a while. The recent selloff has hit altcoins particularly hard, while Bitcoin and Ethereum have remained relatively stable. Without new stimulus and amid ongoing safety and regulatory concerns, market participation remains subdued.
Another factor affecting the crypto market is concerns about possible overvaluation of AI stocks. Should there be a sell-off in AI and tech stocks, Bitcoin could fall below $100,000, while altcoins would likely see even steeper declines. Despite Bitcoin’s slight recovery above $103,000, the leading cryptocurrency remains 18% below its all-time high of $126,000, reached just days before the crash.
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