XRP, ADA Lead Declines in Major Cryptocurrencies as Bitcoin Drops Below $25K

Cryptocurrencies fell Thursday with bitcoin BTC$89,576.21 dropping below $25,000 and XRP and Cardano’s ada ADA$0.4124 extending 24-hour declines to as much as 7.4%. Total market capitalization lost 3.8% in the past 24 hours, CoinGecko data shows.

Further declines may be in store, with some traders suggesting bitcoin could drop to as low as $23,500 based price-chart analysis.

"Bitcoin has retreated to local resistance levels from August last year to February this year," Alex Kuptsikevich, a senior market analyst at trading firm FxPro, said in an email to CoinDesk. "The bulls may try to hold the sell-off near this level, but the current decline is still within the descending channel that has been in place since April."

A descending channel refers to a bearish trend in any asset marked by prices making lower highs on short-term time frames.

"More significant support for bitcoin is near the 200-day average – now at $23.6K and pointing higher," Kuptsikevich added.

ADA's drop means it's fallen more than 20% in the past week after being named with 12 other tokens as a security in a U.S. Securities and Exchange Commission (SEC) lawsuit against crypto exchanges Binance and Coinbase.

XRP erased all gains from a surge earlier this week as markets digested the "Hinman emails" from a Ripple Labs filing on Tuesday. The emails from William Hinman, a former director of SEC’s Division of Corporation Finance, were released to the public in connection with the SEC's lawsuit against Ripple.

Ether ETH$3,030.36, meanwhile, posted a 6.4% 24-hour drop, while ether-tracked futures lodged the highest liquidations among majors at $57 million out of a total of $143 million across all crypto-tracked futures.

Liquidation refers to when an exchange forcefully closes a trader’s leveraged position due to a partial or total loss of the trader’s initial margin. It happens when a trader is unable to meet the margin requirements for a leveraged position, that is, they have insufficient funds to keep the trade open. Large liquidations can signal the local top or bottom of a steep price move, which may allow traders to position themselves accordingly.

Market sentiment was further spooked by general bearish sentiment and an abnormal amount of tether USDT$1.0002 stablecoin sales on the decentralized finance (DeFi) protocol Curve Finance.

USDT balances on Curve’s popular 3pool, a stablecoin swapping pool made up of USDT, USDC and DAI, rose to over 72% early on Thursday, suggesting traders had exchanged tens of millions of USDT in favor of USD coin (USDC) and DAI$0.9996.