After a relatively calm start to the week in crypto markets, the two largest crypto assets, Ethereum and Bitcoin, resumed their decline today.
Increasing risk aversion in global markets and declining investor appetite are increasing pressure on digital assets.
Ethereum ($ETH) fell as much as 6.2% during the day to $1,989. $ETHIt has the second largest market capitalization after Bitcoin and has suffered significant losses compared to Bitcoin since its sharp decline in October.
Ethereum has lost more than 40% of its value since the crypto market peak. Illiquid assets or assets known as “high beta” generally exhibit more volatile behavior compared to market leader Bitcoin.
Vettle Lunde, research director at K33 Research, said Ethereum’s weakness stems from the rapid rally it experienced last fall. Mr. Runde explained that a large influx is occurring. $ETH The proliferation of ETFs, digital asset products, and open positions has made the market vulnerable.
Bitcoin ($BTC) fell as much as 3.5% to $67,878. After hovering around $70,000 over the weekend, $BTC It was below that level on Monday. It briefly approached $60,000 on Friday before recovering.
Bitcoin has largely erased the gains since US President Donald Trump’s re-election in late 2024. Bitcoin recently suffered its longest monthly decline since 2018, despite the Trump administration being crypto-friendly and seen as supportive of the sector.
Mercurio CEO Petr Kozhakov said the market was still looking for a clear direction and the effects of last week’s selloff were still felt. Kozhakov said analysts are trying to understand where the market is headed in the short term.
The downward trend is also noticeable in the Bitcoin derivatives market. The fact that funding rates for perpetual futures contracts remain in negative territory indicates that investors continue to take short positions. Kaiko Research analyst Adam McCarthy said that with funding rates significantly negative, market sentiment is very weak, especially in small-cap altcoins.
$BTC Market analyst Rachel Lucas said that Ethereum’s technical downtrend continues after falling below the $2,800-$3,000 range. According to Lucas, the current decline is being driven by increased macro-level risk aversion and overall weakness in the crypto market.
*This is not investment advice.