Digital asset prices experienced a significant decline on Monday, with Bitcoin (BTC) and Ethereum (ETH) at the forefront of a widespread selloff that pushed major cryptocurrencies to multi-week lows. The total capitalization of the cryptocurrency market dropped by $77 billion, affecting over 400,000 traders who faced liquidations totaling approximately $1.7 billion. This downturn has led to a shift in market sentiment, with traders cautiously reassessing their positions as the month draws to a close.
A mix of macroeconomic factors has played a role in the ongoing selloff. Though a recent interest rate cut by the Federal Reserve was initially perceived as supportive for risk assets, Chairman Jerome Powell’s cautious commentary on inflation has dampened hopes for further rapid easing. Joel Kruger, a strategist at LMAX Group, elaborated that traders are hesitant to continue the recent upward momentum in cryptocurrency without new macroeconomic catalysts.
Despite a stronger U.S. dollar, which reflects concerns over the Fed not being as accommodating as hoped, many investors are taking profits on Bitcoin after the impressive performances seen in September. Kruger remains optimistic that the Fed could eventually align with market expectations, suggesting crypto assets are positioned for a historically strong fourth quarter. He noted that any near-term dips should find solid support, potentially paving the way for new record highs in Bitcoin and Ethereum by year-end.
In terms of technical analysis, Bitcoin has slipped below the psychologically significant $115,000 mark, trading around $112,840 after reaching lows of approximately $111,760. This marks a significant drop from September’s highs of over $117,000. Analysts point out that Bitcoin’s failure to hold above its 50-day moving average at $115,000 is concerning, with predictions for potential further declines toward the $105,000 support zone, which coincides with a 38.2% Fibonacci retracement level.
Ethereum has also been under pressure, falling to around $4,100—its lowest level in more than a month. This sharp decline breached its 50-day exponential moving average, although some recovery brought the price back above $4,200, marking a loss of more than 5% for the day. Technical analysis indicates that Ethereum remains within a consolidation channel established since early August, with key price support at $4,060.
XRP has endured declines for five consecutive sessions, falling below $2.70—a level not seen since early September. The currency has slid from recent highs near $3.12, approaching a multi-month support zone that could be crucial in preventing further depreciation. Analysts note the importance of the $2.58 level combined with the 200-day exponential moving average in establishing support for XRP.
The sharpest decline amongst the major cryptocurrencies was observed in Dogecoin, which fell over 10% during Monday’s session before stabilizing at around 24 cents. Dogecoin’s meteoric rise in September to 31 cents has been sharply reversed, leading it back to a consolidation range typical of earlier months.
Despite recent weaknesses, historical patterns indicate that the fourth quarter is traditionally favorable for cryptocurrencies. Analysts anticipate potential recovery fueled by favorable market flows and positioning, though they caution that sustained dollar strength or adverse geopolitical developments might further challenge the market’s stability.
Key levels in focus include Bitcoin’s support at $105,000, Ethereum’s $4,060 support zone, XRP’s range around $2.58 to $2.70, and Dogecoin’s previous August low near 21 cents. These technical thresholds will be instrumental in determining if the current decline is a simple correction or a precursor to a deeper downward trend.
Overall, while immediate conditions appear challenging, traders and analysts remain watchful for any signs that could signal a shift back toward growth in the cryptocurrency market as the year heads toward its conclusion.
