Major Tokens Fell as Traders Took Profits on a Steady Move Higher

The cryptocurrency market experienced a downturn on Thursday, with major tokens declining by as much as 5% as traders opted to take profits following a steady upward trajectory earlier in the week. Leading the losses was memecoin Dogecoin (DOGE), while Bitcoin (BTC) managed to hold onto the $93,000 zone, albeit with volatility. In contrast, popular cryptocurrencies such as XRP, Solana's SOL, and BNB Chain's BNB saw declines exceeding 2%, with Ethereum (ETH) facing a modest slump of 1.5%. The overall market capitalization contracted by approximately 2.5%, indicating a broader pullback across the crypto landscape, as reflected by the CoinDesk 20 index falling by over 3%. Despite the retracement, Bitcoin saw significant inflows to spot bitcoin exchange-traded funds (ETFs) in the U.S., accruing over $916 million on Wednesday. Some analysts attribute this surge to Bitcoin’s emerging reputation as a safe haven asset amidst equity market fluctuations. Vugar Usi Zade, COO of Bitget, explained that these inflows are largely driven by a declining U.S. dollar index combined with Bitcoin's increasing appeal as a diversification tool amid ongoing macroeconomic volatility. This viewpoint bolsters the narrative that Bitcoin is becoming less correlated with traditional equity markets, contrary to earlier trends. The appeal of Bitcoin as a 'safe haven' has gained traction, particularly following its resilience during recent market corrections which aligns with the behavior of gold. This conviction has been echoed by analysts suggesting that unless significant macroeconomic catalysts arise, Bitcoin's ascent may face short-term hurdles due to weak investment signals. Geopolitical tensions, such as tariff disputes with China and the recent supportive stance of President Donald Trump regarding Federal Reserve Chair Powell, also play significant roles in shaping market sentiment. Analysts at Singapore-based QCP Capital noted that, although some risks appear alleviated—like Trump’s signal of stability regarding Federal leadership—the overarching environment is riddled with complexities stemming from trade frictions and regulatory uncertainties. Overall, traders remain cautious, as mixed signals from economic indicators and political announcements create an atmosphere of volatility that is challenging to navigate. In technical analysis, the $90,000 level for Bitcoin remains crucial, serving as both a resistance and support area over time. It will be a focal point for traders looking to assess future price movements. Should Bitcoin manage to break out above this level, signals could indeed point toward a rally towards $100,000, contingent on sustaining upward momentum. However, should the asset drop below this support, levels like $85,000 could be watched closely due to prevailing moving averages. In sum, the market grapples with a transitional period where traders are keenly attempting to gauge whether it can rebound or whether further correction is on the horizon.