Crypto Market Selloff: Reasons Behind the Plunge
Today, the cryptocurrency market has experienced a steep decline, with significant cryptos such as Bitcoin, ETH, BNB, SOL, XRP, and DOGE retreating. This sudden shift in sentiment from earlier in the week has sparked discussions within the market about potential reasons for the selloff.
Causes of the Selloff
Despite the positive momentum witnessed throughout the week, the sentiment shifted on Friday, triggering a massive selloff. This occurred following the release of U.S. job data by the Labor Department on June 7th.
The data showed a stronger-than-expected increase in employment, with 272,000 jobs added in May. While the unemployment rate also increased, the robust non-farm payroll data weighed on investors' confidence. This dimmed hopes for a potential interest rate cut by the U.S. Federal Reserve, sparking concerns in the financial sector and the crypto market.
Additionally, GameStop (GME) announced its decision to sell $175 million in shares, leading to concerns in the broader market. GME stock closed down nearly 40% on Friday, June 7th. Subsequently, leading meme coins such as GME, DOGE, and SHIB have also declined.
Market Fallout
The volatility has resulted in significant liquidations. According to CoinGlass data, approximately 147,330 traders were liquidated in the past 24 hours, with estimated losses of $411.25 million. The largest single liquidation occurred on OKX, involving an ETH-USD-SWAP worth $5.20 million.
Meanwhile, the global crypto market cap has decreased 3.47% to $2.55 trillion due to rate-cut concerns. Bitcoin price has fallen 2.81% to $69,275.03, while Ethereum has dropped 3.6% to $3,681.7. Solana has plunged 6% to $162.11, and XRP has lost 5% to $0.4998.
Outlook
Despite the recent decline, some investors remain optimistic about a potential rebound. Notably, U.S. Spot Bitcoin ETFs have experienced a significant influx, indicating institutional interest in the leading cryptocurrency.
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