The widely used CoinDesk 20, which is a liquid index of the largest tokens excluding stablecoins, had a 3% decline.
Ahead of the crucial U.S. CPI report, key altcoins, such as bitcoin, are trading poorly.
According to an observer, the sell pressure from wallets that have a history of keeping
coins for a long time is decreasing, which means the downturn may soon run out of steam. After briefly rising to a high of $69,300 during the Asian trading hours, Bitcoin (BTC) is currently on the defensive beneath $69,000, nursing a 2.5% 24-hour decline.
Monday's profit-taking persisted as a number of significant tokens declined. The prices of Ether, Solana's SOL, Cardano's ADA, and dogecoin (DOGE) dropped by as much as 4%. The sole token in the green was BNB Chain's BNB, which increased by a meager 1.8%. With stablecoins excluded, the widely used CoinDesk 20, a liquid index of the largest tokens, saw a 3% decline.
In a statement to CoinDesk, FxPro Senior Market analyst Alex Kuptsikevich warned of a potential volatility eruption following the release of the U.S. consumer price index later on Wednesday. He said that the demand for bitcoin and major altcoins during the Asian session showed trading optimism.
"The U.S. CPI report has an impressive potential to influence the market on Wednesday," Kuptsikevich said. "In recent years, it has caused a spike in volatility comparable to the NFP [nonfarm payrolls report]."
Analysts, however, suggested that the bitcoin downturn might be ending. According to a research released on Tuesday by on-chain analysis company Glassnode, selling pressure from some long-term wallets appears to have decreased in recent weeks, concurrent with an increase in demand for spot bitcoin.
An increase in spot trade volume as well as exchange deposit and withdrawal volumes has contributed to Bitcoin's good performance over the past 12 months, according to analysts at blockchain data tracking company Glassnode. "In recent weeks, long-term holders' profit-taking has cooled off after making a significant rise into the $73,000 ATH. This coincides with an increase in fresh demand prompted by U.S. spot ETFs.
Long-term holders, according to the company, are wallets that hold onto a token for longer than 155 days as opposed to trading on a weekly or daily basis.