On Tuesday, April 2, the cryptocurrency market showed a reversal and the beginning of a bearish trend. Bitcoin (BTC) dropped to the $66,000 level, while the second most capitalized cryptocurrency, Ethereum, fell below the $3,400 level.
At the time of writing, the price of Bitcoin has dropped sharply by 5.7% to $66,523.13. At the same time, overnight trading volume increased by 101.24% to $41.93 billion, and market capitalization reached $1.3 trillion.
The new month has been a difficult one for the crypto market and brought a drop in asset prices, according to CoinGape.
The return of institutional flows failed to provide further upside potential, although there were no outflows from the Grayscale Bitcoin Trust (GBTC).
Crypto trader Daan Crypto Trades suggested that the market downturn could be due to the Easter holiday.
"Grayscale didn't send out anything except some ETH and other coins, which weren't any noteworthy amounts," he wrote in X.
Loading...
Many analysts believe that Bitcoin's decline came amid reduced demand for US spot exchange-traded funds and lower bets on an imminent change in the Federal Reserve's (Fed's) rate-cutting policy.
The changing outlook for Fed action is affecting "the entire cryptocurrency space, where there was a sell-off earlier in the week - no sector was unaffected, especially those where prices have outperformed Bitcoin over the past six months, such as meme coins," said Stefen von Henisch, head of OSL SG Pte.
Meanwhile, there will be a surge in demand for spot Bitcoin ETFs after Bitcoin halves, while the supply of new coins will drop from 900 BTC to 450 BTC per day. The decrease in supply amidst the increase in demand will cause the price of the asset to rise. Analysts predict that after the halving, Bitcoin will grow twice as much as the peak it reached, to $150,000.
Other cryptocurrencies supported the market movement. The value of Ethereum fell 7.0% overnight to $3,348.18, with a market valuation of $404.40 billion. At the same time, ETH trading volume increased by 76.69% to $19.10 billion.
The other leading altcoins, Solana (SOL), XRP, and Cardano (ADA), also supported the market trend. Their value dropped significantly.
Solana's price fell 9.3% to $182.02, while SOL's trading volume increased 68.56% to $4.23 billion.
XRP fell 5.2% overnight to trade at $0.5958. XRP trading volume increased 156.67% to $2.12 billion.
Also read: Cryptocurrency exchange Bitkub plans IPO next year