Cryptocurrencies fell Thursday with bitcoin (BTC) dropping below $25,000 and XRP and Cardano’s ada (ADA) extending 24-hour declines to as much as 7.4%. Total market capitalization lost 3.8% in the past 24 hours, CoinGecko data shows.
Further declines may be in store, with some traders suggesting bitcoin could drop to as low as $23,500 based price-chart analysis.
“Bitcoin has retreated to local resistance levels from August last year to February this year,” Alex Kuptsikevich, a senior market analyst at trading firm FxPro, said in an email to CoinDesk. “The bulls may try to hold the sell-off near this level, but the current decline is still within the descending channel that has been in place since April.”
A descending channel refers to a bearish trend in any asset marked by prices making lower highs on short-term time frames.
“More significant support for bitcoin is near the 200-day average – now at $23.6K and pointing higher,” Kuptsikevich added.
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ADA’s drop means it’s fallen more than 20% in the past week after being named with 12 other tokens as a security in a U.S. Securities and Exchange Commission (SEC) lawsuit against crypto exchanges Binance and Coinbase.
XRP erased all gains from a surge earlier this week as markets digested the “Hinman emails” from a Ripple Labs filing on Tuesday. The emails from William Hinman, a former director of SEC’s Division of Corporation Finance, were released to the public in connection with the SEC’s lawsuit against Ripple.
Ether (ETH), meanwhile, posted a 6.4% 24-hour drop, while ether-tracked futures lodged the highest liquidations among majors at $57 million out of a total of $143 million across all crypto-tracked futures.
Liquidation refers to when an exchange forcefully closes a trader’s leveraged position due to a partial or total loss of the trader’s initial margin. It happens when a trader is unable to meet the margin requirements for a leveraged position, that is, they have insufficient funds to keep the trade open. Large liquidations can signal the local top or bottom of a steep price move, which may allow traders to position themselves accordingly.
Market sentiment was further spooked by general bearish sentiment and an abnormal amount of tether (USDT) stablecoin sales on the decentralized finance (DeFi) protocol Curve Finance.
USDT balances on Curve’s popular 3pool, a stablecoin swapping pool made up of USDT, USDC and DAI, rose to over 72% early on Thursday, suggesting traders had exchanged tens of millions of USDT in favor of USD coin (USDC) and dai (DAI).
Read More Losses on major tokens extended to over 7.4% in the past 24 hours, data shows.