Bitcoin and other cryptocurrencies dropped sharply on Monday as last week’s recovery faded. After staying above $60,000 during the weekend, Bitcoin retreated to $58,000 on Monday morning.
Jasmy, Solana, and Mantra slipped
Other cryptocurrencies, such as JasmyCoin (JASMY), Solana (SOL), and Mantra (OM), dropped by a larger margin. Jasmy fell to $0.02, down over 15% from last week’s highest point.
Similarly, the Solana price fell to $144, lower than last week’s high of $163.25, while Mantra (OM) retreated to $0.9657, down from last week’s high of over $1. Other tokens like Akash Network (AKT), Celestia (TIA), and Render (RNDR) have slipped.
There are a few likely reasons why these tokens are falling. First, last week’s rebound could have been just a dead cat bounce. A dead cat bounce is when an asset in a downfall stages a brief rebound and then resumes the downtrend. These brief rebounds are highly common during a bear market.
Second, Solana, Mantra, and Jasmy are also falling because of the ongoing fears about the unwinding of the Japanese yen carry trade. Analysts have a mixed opinion on the real size of this carry trade, with the figure ranging between $500 billion and $20 trillion. With the Fed set to cut interest rates in September, there is a risk that ending that carry trade will take longer.
Third, these tokens are falling as Bitcoin has already formed the dangerous death cross pattern as the 50-day and 200-day Simple Moving Average (SMA) have crossed each other. On the positive side, the cross is yet to happen using the exponential moving average (EMA), reducing the lag in the SMA.
Weak on-chain metrics
Additionally, Solana is showing some weak on-chain metrics. The number of active addresses on the Solana network has slipped to 1.6 million, down from this month’s high of 2.06 million. In July, the number of addresses jumped to over 54 million. Other blockchains like Sui and Ethereum are also seeing weak on-chain metrics.
Looking ahead, these coins will likely remain under pressure this week, although this could change if the US publishes encouraging inflation data. Economists expect the numbers to reveal that the headline CPI rose slightly in July. If it comes out lower than expected, the probability of a rate cut in September will rise.
