Executive Summary
The Story So Far
Why This Matters
Who Thinks What?
The cryptocurrency market experienced a significant downturn on Friday, with its total capitalization falling below $3.5 trillion following a 3% loss. This decline marked the fourth consecutive day of losses, leading to over $1 billion in total liquidations within 24 hours, predominantly impacting bullish-aligned traders. Altcoins like BNB, Solana (SOL), and Cardano (ADA) led the losses among top digital assets, recording double-digit percentage drops.
Market-Wide Pullback and Bitcoin’s Influence
The broader market sell-off was fueled by Bitcoin’s struggle to maintain its position, trading below the $105,000 mark at the time of writing. This recent market weakness confirms an earlier recovery this week was merely a “dead cat bounce,” as the market continues its downward trajectory.
The substantial liquidations, totaling $1.20 billion, saw long positions account for $943.75 million, significantly outweighing short liquidations of $260.58 million. This biased wipeout of bullish bets has eroded trader confidence and contributed to increased capital outflow across the ecosystem.
Altcoins Under Pressure: BNB, Solana, and Cardano
BNB is currently testing a critical support level at its 50-day Exponential Moving Average (EMA) of $1,046. A decisive close below this point could expose the psychological $1,000 support, with the $977 Pivot Point acting as the next potential floor.
Solana (SOL) is also facing intense pressure around the $175 support zone, a level that previously provided a bounce last week. Having already crossed below its 200-day EMA at $186, a breach of the $175 mark could see SOL test the $155 support zone amid escalating selling pressure.
Cardano (ADA), trading around $0.60, is struggling to find a stable footing. Analysts suggest a potential “free-fall” scenario if current support fails, risking a retest of the $0.5118 level, which has provided support on two prior occasions in April and June.
Technical Indicators Signal Further Weakness
Technically, BNB, SOL, and ADA are all experiencing a significant surge in selling pressure. The Moving Average Convergence Divergence (MACD) for these assets continues to extend its downward trend below the signal line, indicating bearish momentum.
For BNB, the Relative Strength Index (RSI) has dropped to 44, moving below the halfway line and signaling a loss of bullish momentum. Solana and Cardano are seeing their RSIs approach the oversold zone, reflecting heightened supply pressure and potential for further price depreciation.
Derivatives Market Reflects Risk Aversion
The broader cryptocurrency market’s Open Interest (OI) has declined by 5.43% in the last 24 hours, now standing at $151.50 billion. This decrease in the notional value of outstanding futures contracts suggests that investors are actively limiting their risk exposure in a volatile market.
Without an external catalyst to uplift Bitcoin from its current support levels, there is a looming threat of the asset revisiting prices below $100,000, which could instigate further panic and accelerate the market’s decline.
