Crypto Market Sees Decline Amid Trade War Concerns and Weak Institutional Demand

The cryptocurrency market experienced a decline this week, with Bitcoin and most altcoins pulling back. The crypto fear and greed index slipped into the fear zone, reaching its lowest level since October last year.

Altcoin Price Drops

Ethereum dropped to a low of $2,100, down by over 47% from its highest level this year. Similarly, Dogecoin price slipped to $0.2060, its lowest level since Nov. 4, while Ripple fell to $1.8010, down by 47% from the year-to-date high.

Other altcoins, including Solana, Polkadot, and Chainlink, also suffered double-digit losses on Monday. However, most of them pared back some losses and are now approaching their weekly opening levels.

Crypto Market Cap and Trade War Concerns

The total cryptocurrency market cap initially dropped to $3 trillion on Monday before recovering to $3.3 trillion by Friday. The broader crypto market retreated this week amid growing concerns over a potential trade war between the United States and its key trading partners, including China, Mexico, and Canada.

A prolonged trade war between these countries and European nations could trigger a risk-off sentiment, weighing on riskier assets like cryptocurrencies.

Weakening Institutional Demand

Bitcoin and Ethereum ETFs had weak demand, while spot Bitcoin and Ethereum had net outflows this week. MicroStrategy paused Bitcoin purchases last week, after acquiring Bitcoins for twelve straight weeks.

Altcoins, including Ethereum, DOGE, XRP, and SOL, also dropped as investor sentiment weakened.

Market Indicators and Potential Rebound

The crypto fear and greed index fell to 35, its lowest level since October last year. Historically, cryptocurrencies tend to decline when fear dominates the market.

However, a potential bullish catalyst for altcoins is the formation of a hammer candlestick pattern on the weekly chart. This pattern is a well-known bullish reversal signal.

Additionally, Bitcoin has formed a bullish flag pattern on the weekly chart, which could indicate a potential rebound.

Tips for investors:

  • Keep an eye on market indicators, such as the fear and greed index, to gauge investor sentiment.
  • Monitor the altcoin season index to identify potential trends.
  • Consider the potential impact of global events, such as trade wars, on the crypto market.

Stay up to date with the latest crypto news and trends on Global Crypto News.

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