Dogecoin, Cardano and Solana Slump as Crypto Majors See Profit-Taking After Week-Long Rally
Crypto market sees profit-taking after rally
Major cryptocurrencies like Dogecoin (DOGE), Cardano (ADA), and Solana (SOL) experienced a downturn, falling over 5% in 24 hours as traders secured profits following a week-long surge. This correction follows a broader market rally driven by positive macroeconomic factors and renewed investor optimism. Bitcoin, hovering near $104,000 for six days, shows signs of consolidation, a predictable response as it approaches previous all-time highs. Similarly, Ether, trading around $2615, faces resistance at the $2700 mark, potentially indicating an upcoming correction towards $2400 after a 55% rally.
Sentiment indicators reflect growing market exuberance, with the Crypto Fear & Greed Index reaching 73, nearing levels associated with overheated conditions. This surge in risk appetite stemmed from positive US inflation data, strong Chinese tech sector earnings, and a US-China trade breakthrough. These factors boosted global equity markets, leading to Bitcoin briefly exceeding $104,000 and Ether reaching $2700 before encountering resistance. The positive impact of the US-China trade deal on China’s tech sector earnings fueled investor hope for increased investment and AI innovation. Lower-than-expected US inflation added to the bullish sentiment.
Despite the correction, institutional activity remains strong. Santiment data reveals that mid-sized Bitcoin holders (10-10,000 BTC) accumulated over 83,000 BTC in the past month. Coinbase’s upcoming inclusion in the S&P 500 on May 19 is anticipated to act as a short-term catalyst, with analysts estimating passive fund demand could reach over $9 billion. This index inclusion is expected to trigger adjustments by passive managers to align their allocations with the benchmark, potentially driving further short-term gains. While some analysts suggest further rallies are possible, the current market behavior indicates a potential period of consolidation or correction after the recent strong gains.
