Crypto Markets in the Danger Zone as Altcoins, Tokens Tumble
Cryptocurrencies experienced a sudden reversal on Wednesday, as altcoins and tokens succumbed to a fresh wave of selling through the overnight session. A shake-up in the market cap rankings saw Binance Coin leap into tenth spot ahead of bitcoin SV, which has struggled for acceptance following the bitcoin cash hard fork nearly three months ago.
The combined value of all coins reached a low of $111 billion on Wednesday, according to CoinMarketCap. That’s officially the lowest level since mid-December, when markets were recovering from a brutal correction that began on the eve of the aforementioned bitcoin cash hard fork. Between Nov. 14 and Dec. 15, the cryptocurrency market cap more than halved and eventually bottomed near $100 billion. On Wednesday, markets came within $11 billion of that level.
Losses extended to most of the top 20 coins. NEM’s native XEM token was the biggest loser percentage-wise, tumbling 8% to $0.0344. The cryptocurrency is facing an existential crisis after the NEM Foundation declared it was on the verge of bankruptcy.
Bitcoin SV tumbled 6.4% to $58.21, its lowest in over two months. Stellar XLM fell 5% to $0.0746. Cardano, Litecoin and bitcoin cash were each down more than 4%.
XRP was back below the 30-cent mark, as the bulls failed to hold that coveted support. At last check, the so-called banker’s cryptocurrency was down 2.3% at $0.2961. Continue reading: Ripple Fights For $0.30 Support as Market Remains Frozen.
Bitcoin’s downtrend was much more contained relative to its peers, though the leading cryptocurrency was still at risk of a major pullback. BTC is currently trading well below $3,400 on most leading exchanges. In aggregate terms, the price was down 1.7% to #3,409.14, according to CoinMarketCap.
On the opposite side of the ledger, Binance Coin resumed its meteoric surge, gaining another 13.2% to $8.07. That’s the highest level since before the crypto meltdown of mid-November. BNB is now the tenth largest cryptocurrency with a market cap of over $1.1 billion.
Road to Recovery Paved with Obstacles
February is shaping up to be another difficult month for cryptocurrencies. Earlier this week, bitcoin officially entered its longest bear market in history. Altcoins and tokens are expected to cross that plateau later this month.
Expectations of an imminent recovery have all but evaporated as technical trading continues to dictate market flows. Positive fundamental drivers tied to institutional adoption and business innovation have been largely discounted during the recent waves of selling. The expected launch of two bitcoin futures markets later this year has barely swayed investor sentiment. News of Facebook’s acquisition of a blockchain startup has also failed to excite market participants.
The bear market will likely intensify in the near term as technical strategists continue to plumb new lows. Long-term investors can take solace in the fact that this isn’t the first ‘crypto winter’ to engulf digital assets. The first major storm to inflict the market occurred in 2013-15. According to Pantera Capital CEO Dan Morehead, the last multi-year downturn presented an existential crisis for cryptocurrencies. This time around, the fundamentals are too strong to warrant a similar concern. So, while the path to recovery is paved with obstacles, blockchain technology in general and cryptocurrency in particular are already baked into the financial paradigm.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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