Ethereum and Altcoins See Outsized Losses on Macro Pressures

Ethereum ($ETH), XRP, and Solana ($SOL) have recorded outsized drawdowns compared to Bitcoin ($BTC) over a 24-hour period, driven by broader macroeconomic pressures and tightening financial conditions, according to reports by Decrypt.

The total market capitalization of all cryptocurrencies fell by 2.5% to $2.8 trillion. Ethereum dropped by 5.5% to a $289 billion market cap, XRP fell by 5.1% to $82.4 billion, and Solana slipped by 3.8% to $60.6 billion. Meanwhile, industry leader Bitcoin slipped by 3.1% on the day to a market cap of $1.6 trillion.

Macro Pressures and Liquidity Concerns

Experts point to Wednesday's consumer price index coming in at a 3.7% annual rise to September and expectations of an October interest rate hike as major macro catalysts. Nick Forster, founder of options trading exchange Derive.xyz, noted that this shifted traders into protection mode, with hedging activity doubling on the platform as institutional participants reassessed their macro risk exposure.

Luke Nolan, senior research associate at CoinShares, explained that high beta assets like altcoins are typically more sensitive to financial conditions. Nolan also highlighted the U.S. dollar hitting a near 18-month high as a downward pressure on the entire crypto market due to its historical inverse correlation with the U.S. Dollar Index.

Momentum Hangover and Positioning

Max Shannon, senior associate at Bitwise Europe, stated that the slide is a natural hangover from altcoins' recent strength and momentum. Since the start of October, futures open interest in altcoins excluding Ethereum has fallen by $8 billion.

Ethereum specifically experienced 11 straight trading days of net outflows totaling $782.8 million in its exchange-traded funds before a brief inflow, followed by an additional $129.5 million in net outflows according to CoinGlass data.

Key facts

• Total cryptocurrency market capitalization dropped by 2.5% to $2.8 trillion over a 24-hour period.
• Ethereum fell by 5.5% to a $289 billion market cap, XRP dropped by 5.1% to $82.4 billion, and Solana slipped by 3.8% to $60.6 billion.
• The consumer price index rose 3.7% in the year to September.
• Futures open interest in altcoins excluding Ethereum fell by $8 billion since the start of October.
• Ethereum exchange-traded funds recorded 11 straight trading days of net outflows totaling $782.8 million before brief inflows and subsequent net outflows of $129.5 million.