The Ripple Effect of Bitcoin’s Recent Sell-Off
The cryptocurrency market has faced significant turmoil recently as Bitcoin’s prices dipped sharply below $85,000, triggering widespread sell-offs across the altcoin market. Investors are now witnessing a systemic decline as risk appetite continues to shrink.
Altcoin Market Takes a Hit
According to market data, all major altcoins have been impacted. Ethereum (ETH) dropped to $2,818, marking a decline of 6.38% within 24 hours. Binance Coin (BNB) followed suit, slipping by 4.06% to $865. Meanwhile, XRP saw a 5.79% dip to $1.80, extending its week-long declines to over 6%.
Solana experienced one of the steepest pullbacks among large-cap cryptocurrencies, falling by 6.26% within a single day and more than 8.5% over the week. High-risk assets such as Dogecoin and Cardano also declined by 6.69% and 7.17%, respectively, confirming a lack of safe havens in this space.
Trading Volumes Expose Market Weakness
Robust trading volumes underscore the breadth of the sell-off. Ethereum’s 24-hour trading volume surged to over $36 billion, while Solana saw a whopping $6 billion in trading activity, highlighting that this market downturn was broadly distributed rather than an issue of liquidity alone.
The total market capitalization of altcoins has continued to decline, reaching approximately $1.18 trillion. This persistent downward trend has been in effect since early December, showing no signs of reversal in the short term.
Systemic Decline Across Altcoins
Despite isolated rebounds earlier in the month, the altcoin market shows a continued trajectory of lower highs and lower lows. Notably, there is no evidence of significant allocation switches between large-cap and mid-cap cryptocurrencies. Instead, the decline has permeated across the entire market.
Investors are not rotating their portfolios into alternative tokens, as typically seen during such market phases. Instead, elevated leverage liquidations and subdued spot market demand suggest that traders are reducing their exposure altogether.
What Lies Ahead for the Crypto Market?
Unless Bitcoin is able to regain traction and reclaim crucial resistance levels, the altcoin market is likely to remain under pressure. Both Bitcoin and altcoins may see further consolidation, particularly as the broader market continues to adopt a risk-off approach.
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