Crypto Suffers Another Hit Amid Market Uncertainty

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Bearish sentiment prevails in the cryptocurrency space. 

Crypto Market Hit By Another Downturn

The cryptocurrency market is in volatile mode. 

Bitcoin took another big hit this weekend as it tumbled from $42,000 to around $40,600. Ethereum also plummeted to just above $3,000. The $40,000 and $3,000 levels are notable as they act as key psychological milestones for both assets. The two leading crypto assets have since recovered to around $41,800 and $3,130, but most lower cap coins haven’t fared so well. 

Solana, Avalanche, and Polygon are all trading in the red today after shaving off more than 20% of their market value in the last week. The market selloff has also hit gaming tokens like Axie Infinity, a variety of DeFi tokens, and the meme coins Dogecoin and Shiba Inu. 

While most assets have suffered thanks to the bearish sentiment, outliers that have risen over the past week include Chainlink, Harmony, and the Cosmos-based decentralized exchange Osmosis. 

The market took a nosedive Wednesday after the Federal Reserve announced its plans to hike interest rates. This update was notable as it indicated that the cost of borrowing money would likely become more expensive as the Fed attempts to get a hold over inflation. In such environments, risk-on assets like stocks tend to suffer. As this week proved, crypto also tends to take a blow under such conditions. 

While this week has been rocky for most major crypto assets, it follows a prolonged slump across the market. Bitcoin is now down 39.2% from its $69,000 high recorded in early November, while Ethereum is 36.1% short of its peak. Many lower cap coins are down 50% or more. 

After this weekend’s shaky price action, the popular Crypto Fear & Greed Index has registered a score of 23, indicating that the market is in “extreme fear.”

Disclosure: At the time of writing, the author of this feature owned ETH, ATOM, MATIC, and several other cryptocurrencies. 

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Crypto Market Tumbles as Whales Send Bitcoin Below $50,000

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Bitcoin has broken below $50,000 again. Other Layer 1 coins like Ethereum, Solana, Terra, and Polkadot are also down today. 

Bitcoin Faces Resistance

Bitcoin is pushing the cryptocurrency market into the red. 

The leading crypto asset failed to break resistance at $52,000 Monday, leading to a sharp decline below $50,000. It’s currently trading at $49,250. 

Bitcoin’s retrace comes as several indicators point to a bearish outlook for the asset. Santiment data shows that so-called “whales,” large holders who hold between 1,000 and 10,000 Bitcoin, have been selling their coins. The proportion of the supply distributed among holders with 1,000 to 10,000 Bitcoin has dropped to 27.52% in the last week. Moreover, the supply held on exchanges has increased to 2.25 million Bitcoin. The supply held on exchanges is popularly used as an indicator for gauging price action: fewer coins held on exchanges is seen as bullish as it suggests that fewer holders are selling their assets. 

Source: Santiment

Many other assets have also suffered as a result of Bitcoin’s downturn. Ethereum is down 4.5% today, while other Layer 1 coins like Solana, Terra, and Polkadot have been harder hit. Several DeFi tokens such as Uniswap’s UNI, Curve’s CRV, and Maker’s MKR have also trended down. One exception to the decline is Sushi, whose SUSHI token is up 8% in the last 24 hours. The decentralized exchange began rallying yesterday amid renewed confidence in the project following its well-documented struggles of the last few months.  

Bitcoin has had a rocky year despite the crypto market jumping to new highs. It recorded an all-time high price of $69,000 as the global cryptocurrency market cap topped $3 trillion in early November but has struggled to maintain its momentum throughout the rest of the year. It’s suffered from a slump in recent weeks even as other lower cap assets like Polygon and Terra post new highs. Bitcoin’s market cap is currently just over $931 billion at press time, which represents about a 38% share of the cryptocurrency market. 

Disclosure: At the time of writing, the author of this piece owned ETH, CRV, SUSHI, MATIC, and several other cryptocurrencies. They also had exposure to UNI and MKR in a cryptocurrency index. 

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Bitcoin (BTC) $ 37,682.10 0.10%
Ethereum (ETH) $ 2,035.77 0.58%
Litecoin (LTC) $ 69.42 0.25%
Bitcoin Cash (BCH) $ 222.41 0.49%