Bitcoin Corrects to $67,000 Despite Ethereum ETF Approval

The cryptocurrency market saw a sharp correction during early US trading hours, with Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) all experiencing significant drops. This bearish trend wiped out $120 billion, leading to a 2.5% decline in overall market capitalization, now standing at $2.52 trillion.

BTC, ETH, and XRP Lead the Crypto Market Downturn

Bitcoin’s price fell by over 3%, now trading at $67,679. Ethereum and Ripple also saw declines, with XRP dropping by 1.73% to $0.53. This broad sell-off has increased volatility across the cryptocurrency market.

On-chain data shows a substantial inflow of cryptocurrencies to exchanges, suggesting that many investors are preparing to sell their holdings. This influx often precedes market corrections, as increased supply on exchanges can drive prices down, amplifying the bearish sentiment.

Decreasing engagement and activity further reflect the market’s health. Metrics such as active addresses, transaction volumes, and network activity are all declining, indicating reduced investor interest and participation in the crypto ecosystem.

Regulatory News and Inflation Concerns Impact the Crypto Market

Additionally, the release of the Federal Open Market Committee (FOMC) Minutes has made traders more cautious. Many Fed officials expressed concerns about inflation, hinting that this might delay or reduce the number of anticipated rate cuts this year. This cautious outlook has added to the negative sentiment in the crypto market.

Related: Bitcoin Whales Accumulate Aggressively Amid Market Euphoria

Regulatory developments have also played a role in the recent downturn. The SEC has taken a conservative stance on the crypto bill recently passed by the House of Representatives. SEC Chair Gary Gensler emphasized the agency’s openness to dialogue while continuing to enforce laws that ensure token operators provide necessary disclosures to investors.

The market pullback can also be linked to the S&P Global Purchasing Managers’ Index (PMI) report, which showed that the US economy has grown at its fastest pace in two years. This strong economic growth has led traders to reassess their expectations for interest rate cuts, putting additional pressure on Bitcoin and other digital currencies.