In a tumultuous turn of events, the recent crypto market selloff has sparked discussions in the digital asset market while resulting in the liquidation of a staggering $70 billion within a span of 24 hours. Meanwhile, this latest downturn follows a period of heightened volatility in recent days, raising concerns among investors and analysts alike.
Although some have warned abouttshort-term volatility following the recent Bitcoin Halving event, there could be several other reasons weighing on the sentiment. So, let’s take a look at the potential events that might have triggered the recent crypto market selloff.
Economic Data Sparks Fears
The recent crypto market selloff can be attributed to a confluence of factors, with economic data from the United States serving as a primary catalyst for the downturn. The Bureau of Economic Analysis released GDP figures on Thursday, April 25, that fell short of market expectations, indicating a sluggish growth rate of 1.6% compared to the anticipated 2.5%.
In addition, the Core PCE Price Index emerged to 3.7% in the first quarter, while PCE inflation rose to 3.4%, surpassing forecasts. Notably, the GDP data has painted a gloomy picture in the crypto market as well as in the broader financial sector, while intensifying concerns about a potentially hawkish stance from the Federal Reserve.
Meanwhile, amid these developments, the US Personal Consumption Expenditures (PCE) inflation data from Friday, April 26, has further fueled apprehensions among crypto investors. While March saw a modest 0.3% increase in PCE inflation in line with estimates, the year-on-year emerges to 2.7% exceeded market forecasts.
Simultaneously, the Core PCE Inflation, excluding food and energy prices, emerged to 2.8% in March, amplifying concerns about rising inflationary pressures.
These gloomy data have dampened the crypto investors’ sentiment while raising concerns over a further delay in the US Federal Reserve’s rate cut plans. For context, the market is expecting the Federal Reserve to maintain a hawkish stance, as inflation still stayed above their 2% target.
Also Read: Bitcoin ‘Sell’ Calls on the Rise Amid Trader FUD and Impatience, What’s Next?
Spot Bitcoin ETF Outflows Triggers Crypto Market Selloff
Compounding the market downturn, outflows from the US Spot Bitcoin ETF over three consecutive days signaled a cooling sentiment among institutional investors. Notably, significant withdrawals from major players in the cryptocurrency arena, including Grayscale’s GBTC, Fidelity’s FBTC, and Bitwise’s BITB, contributed to the downward pressure on prices.
Meanwhile, Farside UK showed that on April 26 alone, outflows from the US Spot Bitcoin ETF amounted to $83.6 million, exacerbating the crypto market selloff.
As a result of these developments, the global cryptocurrency market cap experienced a substantial decline, shedding nearly $70 billion within a 24-hour period. Notably, the crypto market cap has touched a high of $2.38 trillion and a low of $2.31 trillion over the last 24 hours, suggesting a loss of $70 billion.
However, amid the turbulence, some investors have seized the opportunity to accumulate digital assets at discounted prices, hinting at underlying resilience in the market. As of writing, the crypto market capitalization stood at $2.33 trillion.
Meanwhile, the Bitcoin price lost 2.13% over the last 24 hours and traded at $62,950.61, while its trading volume fell 24.32% to $24.17 trillion. Simultaneously, the Solana price retreated over 5% and exchanged hands at $136.36 amid a slump in the broader crypto market.
On the other hand, the XRP price fell 2.25% to $0.5156 as of writing, with its trading volume dropping 22.59% to $1.02 billion. In addition, the leading meme coin, Shiba Inu price plunged 3.12% to $0.00002463, and its trading volume dropped 27% to $537.25 million.
Also Read: XRP, ADA, BCH, LTC, STX Declared Zombie Among 20 Crypto By Forbes
