Major cryptocurrencies, including Ether, XRP, and Solana, experienced significant price drops on Thursday, struggling to maintain recent stabilization. Bitcoin hovered near $66,700, down approximately 1.7% in 24 hours. Ether saw a similar decline, falling to around $1,965, while XRP and Solana each dropped nearly 5% and 4% respectively. BNB and Dogecoin also registered losses, indicating widespread weakness in the crypto market.
This downturn occurred even as Asian stock markets showed gains. The MSCI Asia-Pacific index, excluding Japan, rose about 0.5%, with Japan’s Nikkei up roughly 0.85% and South Korea’s Kospi reaching a record high with a 3% increase. This positive movement in equities followed a rebound in U.S. tech stocks, spurred by Nvidia's multi-year deal to supply Meta Platforms with AI chips.
However, the crypto market did not mirror this optimism. Recent rallies have been met with consistent selling pressure, with gains quickly dissipating. While the market is no longer reacting severely to every price dip, it lacks the sustained spot demand needed for a significant turnaround.
The U.S. dollar strengthened following the release of minutes from the Federal Reserve’s latest meeting. These minutes indicated that policymakers are in no hurry to cut interest rates, with some even suggesting potential hikes if inflation persists. A stronger dollar typically reduces global liquidity and negatively impacts risk assets, a pattern observed in crypto's pullback.
In contrast, gold has demonstrated resilience, absorbing market uncertainty. Analysts note that gold's stability reflects investor preference for a reliable hedge amidst geopolitical and policy jitters. While gold is seen as a default haven, some believe Bitcoin could recover more rapidly once risk appetite returns, ETF flows stabilize, and regulatory headwinds diminish, given its potential for faster liquidity attraction.
Oil prices maintained recent gains due to ongoing U.S.-Iran tensions, adding to geopolitical risk. Against this backdrop, the crypto market remains caught between temporary rallies and a macroeconomic environment not yet conducive to sustained growth.