Solana, Cardano, Ripple Follow Bitcoin's Drop: Experts Explain Why Crypto Is Down Today

BY Benzinga | ECONOMIC | 02/21/24 02:56 PM EST

The cryptocurrency market is experiencing a correction on Wednesday, coinciding with the release of the Federal Open Market Committee (FOMC) meeting minutes.

What Happened: Recent data from CoinMarketCap shows a 1.28% decrease in the total crypto market capitalization over the last day.

CoinGlass data shows total liquidations of $272.56 million over the past 24 hours, with 97,717 traders getting liquidated:

Among altcoins, Cardano (CRYPTO: ADA), Solana (CRYPTO: SOL) and XRP (CRYPTO: XRP) are each down approximately 4%. Chainlink (CRYPTO: LINK) is down 2%.

According to the latest CoinShares report, investors in blockchain equity ETFs saw outflows of $167 million last week as they opted to secure profits.

Also Read: Bitcoin Tastes $48,000 As Ethereum And Avalanche Follow, Led By Record ETF Asset Inflows: The Week In Retrospect

Why It Matters: Last week, stronger-than-expected inflation data triggered a market sell-off among tech stocks.

Investors fear the possibility of continued tight monetary policy, which may be weighing on cryptocurrency markets.

Following the recent meeting, Fed Chairman Jerome Powell signaled that a March rate cut was unlikely. In the last meeting, the Fed opted to leave rates unchanged.

Scott Melker, host of "The Wolf Of All Streets" podcast, discussed in his latest episode whether a market correction has commenced and if investors should consider buying ahead of the Bitcoin halving.

His guest Noelle Acheson, former managing director of research at Coindesk, suggested that the recent price drop could be attributed to profit-taking or miners selling off Bitcoin. "Timing the top, timing the bottom - can't really do it," Acheson said.

Price Action: Bitcoin (CRYPTO: BTC) retraced from its recent highs of $52,000 to trade as low as $50,881 in early trading on Wednesday. Ethereum (CRYPTO: ETH) also dipped to $2,883 after reaching levels around $2,900 earlier in the week.

What's Next: Market participants are monitoring whether the Bitcoin halving event will catalyze a price rally into 2024 or if a different scenario unfolds.

Read Next: Ethereum Registers 15% Weekly Gain, $3,000 Within Reach: 'As Bullish As Fundamentals Can Get,' Says Analyst

Image created using artificial intelligence with MidJourney.

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