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Altcoins See Decline at Start of the Week as Bitcoin and Ether Find Stability

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Crypto Market Starts the Week Lower as Bitcoin and Ether Stabilize

Altcoins Experience Downward Movement

At the beginning of the week, the crypto market saw a decline, with bitcoin recording its worst week since May. Bitcoin remained flat at the $26,000 mark, while altcoins faced larger downward movements. Ripple's XRP slid nearly 5%, and coins tied to Ethereum competitors Solana, Polygon, and Cardano lost about 3% each. DeFi tokens also experienced a decline, with the Cosmos token losing over 3% and Uniswap's coin dropping by 2%.

External Pressure and Market Outlook

According to Chris Martin, head of research at Amberdata, the sell-offs in the crypto market are primarily driven by external pressure in China. The broader economic downturn and the role of Asia, particularly Hong Kong and Singapore, are contributing factors. This has led to a shift in expectations for the bull market, with doubts about its potential to unfold as previously anticipated.

Bitcoin and Ether as Store of Value

While bitcoin and ether tend to act more as a store of value compared to other cryptocurrencies, they have also experienced significant drops of 11.5% and 9.8%, respectively, in the past seven days. However, these cryptocurrencies are not immune to market fluctuations. As more institutions onboard through spot ETFs, spot investments, and derivatives, the volatility of altcoins is expected to subside.

Market Factors and Expectations

The third quarter has been relatively stagnant for bitcoin, historically a weak period for the cryptocurrency. It has seen a decline of 14% for the quarter and about 10% for August. The anticipation of an approved spot bitcoin ETF or clear crypto legislation from Congress to drive upside volatility has been replaced by the Federal Reserve's focus on real rates and the impact of China's Evergrande bankruptcy protection filing, which has put downward pressure on the crypto market.

In conclusion, while the crypto market experienced a decline at the start of the week, bitcoin has shown resilience despite its recent drop. The market outlook remains uncertain, influenced by external pressures and market factors. Despite recent softness, bitcoin has still shown significant growth in 2023, highlighting its potential as a long-term investment.

Implications for New Businesses

The recent decline in the crypto market, particularly among altcoins, could have significant implications for new businesses, especially those operating in the crypto space or considering crypto investments.

Understanding Market Volatility

The volatile nature of the crypto market, as demonstrated by the recent downward movement of altcoins and the stabilization of bitcoin and ether, underscores the need for new businesses to understand and navigate market fluctuations. This can be particularly challenging for startups and small businesses with limited resources.

Strategic Planning and Risk Management

The external pressures and market factors influencing the crypto market highlight the importance of strategic planning and risk management for new businesses. This includes monitoring global economic trends, understanding the role of regulatory bodies, and adapting to changes in market expectations.

In conclusion, the recent decline in the crypto market offers a timely reminder of the risks and opportunities associated with crypto investments. While the market outlook remains uncertain, the resilience of bitcoin and ether suggests potential for long-term growth. New businesses should approach the crypto market with caution, ensuring they have the necessary knowledge and strategies to navigate its volatility.

Story First Published at: https://www.cnbc.com/2023/08/21/altcoins-slide-to-begin-the-week-while-bitcoin-and-ether-stabilize.html
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