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Crypto market sells off amid fresh wave of negative news

2021.06.08 Adam James

The FBI's seizure of high-profile ransomware BTC and Donald Trump's dislike of Bitcoin have hamstrung any bullish sentiment. 

The cryptocurrency market has undergone a sell-off after a slate of bad news went to press yesterday. 

Most notably, reports that the United States Federal Bureau of Investigation seized 63.7 BTC paid by Colonial Pipeline to ransomware attackers sparked a fresh wave of misinformation about the foremost cryptocurrency — primarily, that its hashing algorithm had been broken.

Earlier, former U.S. President Donald Trump was quoted as saying that Bitcoin "seems like a scam" and that he doesn't "like it because it's another currency competing against the dollar."

The negative press has caused the global cryptocurrency market capitalization to lose roughly 9%, as of the time of this writing — with market leaders BTC and ETH both down nearly 8%. At the same time, many altcoins are down more than 10%.

The cryptocurrency market is a sea of red after a fresh slate of bad news sparked a new sell-off. Source: Coin360

DeFi market hemorrhages value amid crypto market crash

The decentralized finance market has not been spared by cryptocurrency sellers. The total value locked in DeFi has dropped below $60 billion to roughly $58.5 billion. Leading protocol Aave has lost more than 17% in TVL, while second-ranked Maker's TVL has dropped more than 10%.

The total value locked in Aave has declined roughly $12.33 billion. Source: DeFi Pulse

Uniswap has been hit the hardest among the leading decentralized exchanges, having lost more than 8.5% of its total value locked. Top-ranked DEX Curve Finance, by comparison, has lost 4.83%.

Top altcoin gainers and losers: Select large-caps buck trend

  • KP3R/USDT +27.21%
  • AUCTION/USDT +13.61%
  • LEO/USDK +12.55%
  • WGRT/USDT -14.05%
  • EM/USDT -16.00%
  • APM/USDT -16.48%

Despite the wider cryptocurrency market sell-off, there are select altcoins that are outperforming. Among large-cap altcoins, LEO, HBAR and THETA are bucking the trend.

LEO has bucked the wider market sell-off on OKEx. Source: OKEx

BTC technical analysis: Testing crucial area of support

The price of BTC has declined to test a key area of support around 33,000 USDT. While many traders expect buy interest to keep the leading cryptocurrency's price afloat, failure to hold 30,000 USDT could spark an outright panic in the wider market — opening the door to 26,000 USDT.

OKEx's BTC/USDT 4h chart — 6/08. Source: OKEx, TradingView

ETH technical analysis: Still bullish against BTC

With BTC's price action driving the market, ETH is still holding up against the leading cryptocurrency. While trading above both the ribbon of exponential moving averages on the four-hour time frame and the upward-sloping trendline, the bullish trend is still intact.

OKEx's ETH/BTC 4h chart — 6/08. Source: OKEx, TradingView

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Disclaimer: This material should not be taken as the basis for making investment decisions, nor be construed as a recommendation to engage in investment transactions. Trading digital assets involve significant risk and can result in the loss of your invested capital. You should ensure that you fully understand the risk involved and take into consideration your level of experience, investment objectives and seek independent financial advice if necessary.