Bitcoin, Ethereum, And XRP In Freefall: What’s Driving The Current Crypto Slump?

The cryptocurrency market began the week with a notable downturn, as total sector capitalization dipped toward $3.8 ￰0￱ (BTC), the leading cryptocurrency, experienced a significant correction, trading as low as $112,700. CoinGecko data shows that this decline had a ripple effect, causing major altcoins such as Ethereum (ETH), XRP, Solana (SOL), and Dogecoin (DOGE) to register losses of 7%, 5%, 7%, and 10%, respectively. S&P 500 Rises While Crypto Market Slumps The selloff also impacted crypto-related ￰1￱ investment firm Strategy (MSTR) saw a decline of 2.6%, while US-based crypto asset exchange Coinbase fell by 3.4% during afternoon ￰2￱ contrast, the benchmark S&P 500 index managed to gain 0.4%, positioning itself for another potential all-time ￰3￱ Reading: Ethereum Slides 6% as Bulls Lose Grip on $4,500 Resistance; $4,000 Incoming?

Analysts suggest that the recent market slump can be attributed to a buildup of excess leverage following last Thursday’s Federal Reserve (Fed) decision to cut interest ￰4￱ Morgan McCarthy, head of research at Kaiko, indicated that funding rates have risen since the Fed meeting, pointing to speculative trading that may have occurred in the wake of the rate ￰5￱ noted that the combination of excess leverage from speculative bets and an earlier price decline triggered a wave of liquidations, further exacerbating the market ￰6￱ Bank Predicts Bitcoin Recovery The Fed’s decision to lower borrowing costs by a quarter point marked its first rate cut of 2025.

However, as Barron’s reported on Monday, Chair Jerome Powell characterized this move as a “risk-management cut,” implying a cautious approach rather than a wholesale easing of monetary ￰7￱ Reading: Bitcoin Stuck In Neutral While Markets Roar — Analyst Explains Why Despite the immediate challenges facing the cryptocurrency market, the longer-term outlook appears ￰8￱ Bank strategist Marion Laboure expressed confidence in Bitcoin’s recovery, predicting it could surpass $120,000 by the end of ￰9￱ image from DALL-E, chart from ￰10￱