The crypto market lost $300 billion in value in a week. Bitcoin has the worst decline since March

The combined capitalization of the cryptocurrency market has fallen by about $300 billion in the current week, Bloomberg reported. The sharp weakening of leveraged positions hit the largest tokens and brought market sentiment down to its lowest point since early summer.

Ethereum, the second most capitalized cryptocurrency in the world, became the leader of the sell-off. The token showed the strongest decline since June - by 12% over the week, Bloomberg calculated. The price of Ethereum fell below $4000. Bitcoin did not escape the pressure: it fell in price by about 5%, which is the maximum weekly decline since March. On September 26, Ethereum recovered some of its losses, rising by 3%, while bitcoin remained virtually unchanged in price, CoinGecko service shows.

Along with the decline in the value of cryptocurrencies, the shares of companies related to this market also fell in price. Thus, the shares of the crypto exchange Coinbase decreased by 9.56% during the week. Shares of the trading platform Robinhood at the end of the week in the minus by 2.46%. Shares of bitcoin miner Mara Holdings fell 13.4%. And shares of Strategy, the largest corporate bitcoin holder, lost 11.6% of their value.

The fall accelerated due to the mass closing of bullish positions in the open-ended crypto futures market, Bloomberg claims. According to Coinglass, exchanges have liquidated more than $3 billion in long positions. Bitcoin and Ethereum exchange-traded funds (ETFs) traded in the U.S. have also come under heavy pressure, with cumulative net outflows totaling more than $500 million on Thursday alone.

The cryptocurrency market is influenced by the macroeconomic environment, especially inflation data and expectations regarding the Federal Reserve's policy, Bloomberg notes. Tokens are also reacting sharply to a decline in demand from institutional investors. In recent months, publicly traded companies, which previously actively bought bitcoin to place on their balance sheets, have sharply reduced their purchases. According to CryptoQuant, such digital treasuries bought 64,000 bitcoins in July, 12,600 in August, and about 15,500 since the beginning of September: a 76% decline from early summer peaks.

Paul Howard, senior director of market maker Wincent, called the current decline a "healthy correction," Bloomberg writes. The total market capitalization of digital assets has fallen below $4 trillion again, but the analyst sees no signs of panic in the market. Howard warns that short-term pressures may persist as digital assets have become more correlated to macroeconomic sentiment than they were at the beginning of the year. "For the first time this year, I'm starting to question whether we'll see new all-time highs before the end of the year," Howard admitted.

This article was AI-translated and verified by a human editor