Cryptocurrency Market Update: Bitcoin Price Drop, Altcoin Liquidity Drain, and Cardano’s Resilience

Introduction

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Latest Prices Update

Bitcoin’s price surged above $62,000 in the early Asian session before retreating to $61,400. The drop was triggered by significant on-chain activities related to the German government’s Bitcoin holdings. Germany transferred 750 BTC, worth over $46 million, with 250 BTC sent to crypto exchanges Bitstamp and Kraken, suggesting a possible token sale. This move, part of divesting BTC seized from a privacy website, added bearish pressure to the market. Germany currently holds more than 45,000 BTC. Ether mirrored Bitcoin’s decline, slipping from $3,425 to $3,375, and the CoinDesk 20 Index (CD20) also dipped by about 0.14%.

Altcoin Liquidity Drain

Alternative cryptocurrencies have experienced a more significant liquidity drain than Bitcoin and Ether recently. The notional open interest tied to altcoins dropped by 34% to $12 billion since Bitcoin’s peak above $70,000 on June 7, compared to a 13% decrease in Bitcoin and Ether futures open interest to $29.3 billion. This one-way flow exacerbates underperformance in altcoins relative to major cryptocurrencies due to decreased bid-side liquidity, fewer market makers, and increased coin issuance.

Cardano’s Resilience

The Cardano blockchain successfully repelled a distributed denial of service (DDoS) attack targeting staked tokens on Tuesday without disrupting network operations. In a DDoS attack, a large number of compromised computers flood a target with excessive traffic, causing it to become overloaded and inaccessible. The attack on Cardano was swiftly stopped by deregistering the stake credentials used by the attacker, maintaining network stability. The ADA token remained relatively stable amidst broader market sentiment fluctuations.

Chart of the Day

– Omkar Godbole