Shitcoin Market in Freefall, SENT Plunges Over 33% in 24 Hours

The shitcoin market is experiencing a rapid downturn as investor sentiment wanes. Shiba Inu (SHIB) and other meme tokens have fallen sharply, with SENT dropping over 33% in the last 24 hours. This decline comes amid broader market uncertainty and regulatory shifts in the cryptocurrency space.

Trove Markets, a decentralized perpetual exchange, has faced significant backlash after shifting its focus from Hyperliquid to Solana. Investors who participated in Trove’s token sale are now seeking refunds, claiming the pivot undermines the original investment thesis. The project announced the move on X, citing a liquidity partner's withdrawal of 500,000 HYPE tokens as a key factor.

The CLARITY Act, a proposed crypto market structure bill, has seen growing opposition from key players. Coinbase, a major backer of the legislation, recently withdrew its support, citing concerns over DeFi restrictions and stablecoin yield provisions. The White House has responded with frustration, suggesting it may abandon the bill unless a compromise is reached.

Bitcoin ETF inflows have shown a modest rebound, with $1.8 billion in net inflows recorded for the week. However, total assets under management remain 24% below the all-time high, indicating that the recovery is still in its early stages. Analysts suggest sustained institutional demand is needed for Bitcoin to reach $100,000.

Regulatory developments and macroeconomic conditions continue to shape Bitcoin's price trajectory. The recent delay in the CLARITY Act's progress has created uncertainty in the market, while easing geopolitical tensions have provided some short-term relief. On-chain metrics, however, indicate growing buying pressure and healthier supply-demand dynamics .

Why Did This Happen?

Trove Markets' shift to Solana has raised concerns among investors who funded the project with the expectation of Hyperliquid integration. The company cited a liquidity partner's withdrawal of HYPE tokens as a reason for the pivot. Some community members have demanded refunds, arguing that the move violates the terms of the original investment.

Coinbase's withdrawal from the CLARITY Act has added to the regulatory uncertainty. The exchange cited risks to DeFi and stablecoin yields as key issues, with CEO Brian Armstrong stating that the current version of the bill would do more harm than good. This move has sparked a debate over the balance of power between crypto platforms and traditional financial institutions.

Shitcoin prices have been particularly sensitive to these developments. The broader crypto market has seen a decline in investor confidence, with many pulling funds from speculative tokens. SENT's 33% drop in 24 hours reflects this shift, as investors seek safer assets amid regulatory and market volatility according to reports.

How Did Markets React?

Bitcoin ETF inflows have shown some signs of recovery, but the total assets under management remain significantly below the peak. This suggests that the market is still in a consolidation phase. Analysts believe that sustained institutional demand is necessary for Bitcoin to break through the $100,000 level.

The broader crypto market has also seen a pullback, with altcoins declining alongside Bitcoin. Total market capitalization has fallen by 2.8% over the past 24 hours, reflecting the ongoing outflows. Institutional investors have been a key driver of recent movements, with XRP seeing a 428% inflow surge in the last week.

Regulatory uncertainty continues to weigh on the market. The CLARITY Act's stalled progress has led to speculation that the bill may be abandoned altogether. This has created a split in the crypto industry, with some supporting Coinbase's stance and others arguing that the company should not hold veto power over industry-wide legislation.

What Are Analysts Watching Next?

On-chain metrics are showing signs of improved buying pressure in the Bitcoin market. The 90-day Spot Taker Cumulative Volume Delta (CVD) has shifted toward a taker buy dominance phase, indicating that sellers are being absorbed. This suggests that the supply-demand structure is strengthening, which could support a price rally.

Analysts are also closely watching the regulatory environment. The outcome of the CLARITY Act negotiations could have a significant impact on the market. A clear and favorable regulatory framework would likely attract more institutional investors and stabilize the market. However, a prolonged delay or a negative outcome could prolong the current uncertainty.

Bitcoin's price is currently facing a critical technical resistance level. A successful break above the 200-day Exponential Moving Average (EMA) could push the price toward $108,000. This would require continued institutional participation and regulatory clarity to maintain momentum according to analysis.

The broader market is also watching for signs of a sustained recovery. While ETF inflows have rebounded, they remain below peak levels. A sustained period of net inflows is needed to confirm that the market is entering a new phase of growth. Until then, the market remains in a consolidation phase, with prices likely to remain volatile.

Corporate adoption of Bitcoin is another area of interest. Companies like Steak 'n Shake have started using Bitcoin as part of their payment infrastructure, which could drive wider adoption. This approach differs from balance-sheet-driven strategies and could lead to a different path for corporate Bitcoin ownership.