The cryptocurrency market has tripped againwith Bitcoin, Ethereum and XRP prices falling after what appeared to be a promising rally. Despite a strong lineup of bullish stories, ranging from interest rate cuts in October to increase clarity in the regulatory framework, the momentum has weakened significantly. This brings in questioning the prospects of the crypto industry before the end of the year.
Technical failure weakens market confidence
The sharp withdrawal started with technical cracks that appeared across Bitcoin, Ethereum and XRP charts. The past 24 hours have seen Bitcoin, which recently climbed above $103,000, resume what looks like another downtrend threatening a break below $100,000.
According to a new view from The DeFi report, the rally looks good on paper for Bitcoin and other popular cryptocurrencies. However, technical analysis shows that the leading cryptocurrency is currently below several key moving averages, including the 50-, 100-, and 200-day indicators. These moving averages often act as dynamic support zones, and breaking below them tends to signal that bullish momentum is waning.
Ethereum has also followed this downtrend, falling back below its $3,400 support. XRP’s fall has been similar, with the cryptocurrency slipping back below $2.3.
The technical deterioration of these leading assets is conveying a more cautious stance among traders, many of whom now see the market’s structure as vulnerable to further downside.
Declining demand and institutional outflows
While there are still bullish stories, ranging from pro-crypto policy direction under the Trump administration to tokenization efforts by traditional financial institutions, the inflow of new capital has slowed.
Spot Bitcoin ETFs, once the primary source of institutional interest, has seen remarkable outflows, wiping billions of dollars in value since early October. In terms of net flows and AUM, Bitcoin ETFs have been among the most successful financial products in history. But since October 10, the ETFs have seen a net outflow of $1.4 billion.
Chain data further supports this story about cooling needs. Long-term holder reduces its holdingsand the majority of these are absorbed by short-term holders, as evidenced by data from Glassnode.
When it comes to market sentiment, optimism still very much dominates of the conversation in social media. Michael Nadeau, founder of The DeFi Report, noted that a large segment of investors are hopeful despite the recent downturn. Investors seem to gravitate toward bullish reports and look for something to hold on to.
At the time of writing, Bitcoin is trading at $101,720, down another 1.3% in the last 24 hours. Ethereum is also down about 1% over the same time frame, trading at $3,330.XRP feel the burden the most, down 4.5% in the last 24 hours and traded at $2.2
Featured image created with Dall.E, charts from Tradingview.com
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