Bitcoin (CRYPTO: BTC) prices took a tumble on Tuesday morning, dipping below $63,000 and dragging the entire cryptocurrency market down with it.
This sudden drop resulted in an 8% decline in total market capitalization within a 24-hour period.
Analysts are pointing to a shift in investor sentiment as a potential catalyst.
Data shows that Monday saw a significant outflow from the Grayscale Bitcoin ETF, a major investment vehicle for institutional investors.
This outflow, coupled with lower-than-usual inflows on other ETF products, suggests a potential pullback from some investors.
On-chain analysis firm CryptoQuant observed increased selling pressure, possibly fueled by short-term Bitcoin holders cashing out profits.
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These are investors who typically hold their tokens for less than five months.
The selloff extended beyond Bitcoin, impacting other major cryptocurrencies.
Ethereum (CRYPTO: ETH), Solana (CRYPTO: SOL), BNB Chain (CRYPTO: BNB), and Cardano (CRYPTO: ADA) all experienced significant drops exceeding 9%, according to CoinGecko data.
The meme coin sector, known for its volatility and often fueled by social media hype, witnessed even steeper losses.
Data shows an average decline of over 17%, with Dogwifhat (CRYPTO: WIF) and Floki (CRYPTO: FLOKI) leading the downward trend at a staggering 18% drop each.
While meme coins have delivered impressive gains so far in 2024, their price movements are notoriously unpredictable and susceptible to rapid swings.
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Image created using artificial intelligence with Midjourney.
