The cryptocurrency market is facing significant losses after recording its second-worst weekly performance of 2024, marked by a 5% decline in the largest 100 digital assets over the past week, according to Bloomberg data. This downturn represents the sharpest fall since April and reflects weakening demand for Bitcoin exchange-traded funds (ETFs) as well as prevailing uncertainty surrounding monetary policy decisions.

Bitcoin, the leading cryptocurrency, dropped below $63,000 to reach its lowest point in over a month, influenced by a continuous six-day outflow from U.S. ETFs holding the cryptocurrency. This decline underscores growing concerns about the Federal Reserve’s ability to rapidly decrease interest rates, which are currently at their highest in two decades. Analysts are viewing the downturn in digital currencies as a potential indicator of reduced risk appetite across broader markets.

The crypto sector is experiencing a period of low volatility and subdued trading volumes, making the market susceptible to significant price movements when trading reaches the limits of its typical range, noted David Lawant, head of research at FalconX.

In particular, cryptocurrencies like Ether and Solana are witnessing their longest sequences of weekly losses since last year and 2022, respectively. This occurs even as financial firms gear up to introduce the first U.S. ETFs that will directly invest in Ether, the second-largest cryptocurrency. Solana had also been recently favored by various digital-asset hedge funds.

Despite reaching a peak of $73,798 in March, Bitcoin is currently underperforming compared to traditional assets such as stocks, bonds, and gold in this quarter. The recent trends highlight the challenges and shifts in investor sentiment within the cryptocurrency market.