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Crypto Market Crashes: Traders React With “Buy The Dip” Calls

The crypto market has seen a plunge today, and it would appear that social media users have reacted by calling to buy this “dip.”

Coins Across The Crypto Sector Are In The Red Today

According to data from the on-chain analytics firm Santiment, social media mentions of “buy the dip” have gone up following the latest tumble that the crypto market has experienced.

The relevant indicator here is the “social volume,” which keeps track of the number of unique posts/threads/messages on the various social media platforms that mention a specific topic.

The metric counts the posts themselves instead of the mentions because this method provides a more accurate representation of the behavior among social media users as a whole.

Consider two scenarios: one where a large number of mentions are happening over a few posts and another where mentions are also taking place but are spread out over a large number of posts.

In the first, discussion is limited to a specific group of users, but going by the mentions, this case would have as much interest in the topic as the latter when it’s not the case.

Now, to find whether “buy the dip” is gaining traction among crypto investors, what Santiment has done is filter out the social volume of crypto first and then search these posts for the mention of terms related to this idea.

Here is a chart that shows the trend in the social volume for this topic over the last month:

Crypto Buy The Dip

The graph shows that the crypto social volume for terms related to “buy the dip” has shot up after this plummet in the market. In the same chart, the analytics firm has also attached the “social dominance” data, which keeps track of what percentage of these discussions are adding up.

Social dominance has also registered a spike recently, and at the peak of this spike, it seems the metric assumed a value of about 0.7, which means 0.7% of all discussions related to the crypto sector involved this topic.

“Crypto has experienced its fastest drop in 4 months as markets have corrected and caused mild trader concerns,” notes Santiment. “There is a high level of buythedip calls, which typically means that there is a bit of overeagerness and FOMO on these low prices.”

While the market is optimistic about this plunge, too much optimism about things like “bottoms” has historically actually backfired for the assets’ prices. Thus, these mentions aren’t a sign that Bitcoin and others have finished with their decline, and more could potentially be on the way.

BTC Price

Bitcoin had gone under the $41,000 mark during its initial plunge, but it wasn’t long before it made some recovery towards the current price.

Bitcoin Price Chart

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Crypto Market Crashes: Traders React With “Buy The Dip” Calls

The crypto market has seen a plunge today, and it would appear that social media users have reacted by calling to buy this “dip.”

Coins Across The Crypto Sector Are In The Red Today

According to data from the on-chain analytics firm Santiment, social media mentions of “buy the dip” have gone up following the latest tumble that the crypto market has experienced.

The relevant indicator here is the “social volume,” which keeps track of the number of unique posts/threads/messages on the various social media platforms that mention a specific topic.

The metric counts the posts themselves instead of the mentions because this method provides a more accurate representation of the behavior among social media users as a whole.

Consider two scenarios: one where a large number of mentions are happening over a few posts and another where mentions are also taking place but are spread out over a large number of posts.

In the first, discussion is limited to a specific group of users, but going by the mentions, this case would have as much interest in the topic as the latter when it’s not the case.

Now, to find whether “buy the dip” is gaining traction among crypto investors, what Santiment has done is filter out the social volume of crypto first and then search these posts for the mention of terms related to this idea.

Here is a chart that shows the trend in the social volume for this topic over the last month:

Crypto Buy The Dip

The graph shows that the crypto social volume for terms related to “buy the dip” has shot up after this plummet in the market. In the same chart, the analytics firm has also attached the “social dominance” data, which keeps track of what percentage of these discussions are adding up.

Social dominance has also registered a spike recently, and at the peak of this spike, it seems the metric assumed a value of about 0.7, which means 0.7% of all discussions related to the crypto sector involved this topic.

“Crypto has experienced its fastest drop in 4 months as markets have corrected and caused mild trader concerns,” notes Santiment. “There is a high level of buythedip calls, which typically means that there is a bit of overeagerness and FOMO on these low prices.”

While the market is optimistic about this plunge, too much optimism about things like “bottoms” has historically actually backfired for the assets’ prices. Thus, these mentions aren’t a sign that Bitcoin and others have finished with their decline, and more could potentially be on the way.

BTC Price

Bitcoin had gone under the $41,000 mark during its initial plunge, but it wasn’t long before it made some recovery towards the current price.

Bitcoin Price Chart

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Crypto Market Drops Back Into Extreme Fear As Crash Continues

Data shows the crypto investor sentiment has once again plunged back into extreme fear, as the crash in the market continues.

Crypto Fear And Greed Index Now Points To A State Of “Extreme Fear”

The “fear and greed index” is an indicator that measures the general sentiment among investors in the crypto market.

The metric uses a numeric scale that runs from zero to hundred for displaying this sentiment. All values above fifty imply a greedy market, while those below the threshold suggest fearful holders.

Values of more than 75 and less than 25 denote special sentiments called “extreme greed” and “extreme fear,” respectively.

The significance of extreme greed is that cyclical tops in Bitcoin and other coins have tended to form during periods with this sentiment.

On the other hand, bottoms have usually formed in stretches where the market has been extremely fearful.

Now, here is a chart that shows the trend in the crypto fear and greed index over the past year:

Crypto Fear And Greed Index

Looks like the value of the metric has taken a plunge in recent days | Source: Alternative

As you can see in the above graph, the crypto fear and greed index has been showing fear values for a year now, with the market actually spending a lot of this period all the way down in extreme fear.

The latest rally in the prices of coins like Bitcoin significantly improved the investor sentiment recently, as the indicator rose from 20 to 40, implying it was nearly on the edge of greed.

However, the latest market-wide crash over the last couple of days has dealt a violent blow to the holder mentality, making it plummet back into the extreme fear zone.

Crypto Extreme Fear

The fear and greed index needle currently points at 22, an extreme fear value | Source: Alternative

The latest failure to escape into greed means the market has been fearful for around a year now (with the exception of some very brief spikes), continuing the longest stretch of such sentiment since the indicator was conceived back in 2018.

And the way the market environment is currently developing, the streak is probably going to go on for a while still.

BTC Price

At the time of writing, Bitcoin’s price floats around $16.2k, down 19% in the last week. Over the past month, the crypto has lost 16% in value.

The below chart shows the trend in the price of the coin over the last five days.

Bitcoin Price Chart

The value of the crypto seems to have taken a deep dive during the last couple of days | Source: BTCUSD on TradingView
Featured image from Elizabeth Meyers on Unsplash.com, charts from TradingView.com, Alternative.me

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Bankman-Fried Is Looking At “Secretly insolvent” Small Exchanges & Crypto Miners

It’s Sam Bankman-Fried’s time in the spotlight. The FTX and Alameda Ventures golden boy put both of his companies in a winning position and seems to be carrying the spoils away. The recent Forbes piece about secretly insolvent exchanges puts it best, “Like J.P. Morgan during the stock market panic and crash of 1907, Bankman-Fried is taking advantage of the crypto chaos to expand his empire.” Rumors about his involvement in engineering the crash appear to be greatly exaggerated.

NewsBTC reported on FTX’s bailout of BlockFi and Alameda bailing Voyager. In the first article, we summarized the congested macro situation:

“Over the last few weeks, the crypto market has been trending down. The contagion effect of the Terra/ Luna extinction event rocked every company out there, most of all those who offered yield on cryptocurrency deposits like BlockFi and Celsius and hedge funds like Three Arrows Capital. These companies’ problems and possible liquidation of assets, in turn, sent the crypto market into even more turmoil.”

In the Fobes piece, speaking about BlockFi and Voyager’s bailouts, they paint a similar situation with a crucial difference. Here, Bankman-Fried is performing a sacrifice:

“Between FTX and his quantitative trading firm Alameda, he provided the companies with $750 million in credit lines. There is no guarantee that Bankman-Fried will recoup his investment. “You know, we’re willing to do a somewhat bad deal here, if that’s what it takes to sort of stabilize things and protect customers,” he says.”

And, as you can read, that’s according to Bankman-Fried himself. A few lines below, the article casts doubt on his assessment, “Bankman Fried’s cash infusions are far from altruistic. He has emerged as a smart vulture capitalist in the beleaguered crypto market, knowing full well that his own fortune depends on its healthy rebound and growth.”

Robinhood price chart on NASDAQ | Source: TradingView.com
Bankman-Fried Sets Sight On Small Exchanges And Miners

The rumor that FTX is looking for a way to acquire Robinhood circulated today. The Forbes article elaborates on that subject. “Bankman Fried has also bought into crypto brokerage Robinhood, where FTX has already accumulated a 7.6% stake, and is rumored to be considering an acquisition.” 

Not only that, Forbes estimated that there are more than 600 crypto exchanges in the world. Then, they quote Bankman Fried claiming, “there are some third-tier exchanges that are already secretly insolvent”. Is the implication that his two companies are considering buying some of them? Maybe. However,  Bankman Fried will be picky about exactly which ones:

“There are companies that are basically too far gone and it’s not practical to backstop them for reasons like a substantial hole in the balance sheet, regulatory issues, or that there is not much of a business left to be saved.”

In a strange turn of events Bankman-Fried, one of Proof-Of-Stake’s biggest proponents, expressed interest in “crypto miners”. Even stranger, the article then proceeds to list two bitcoin mining companies. Who introduced the word “crypto,” Bankman-Fried or Forbes?

“Bankman-Fried also has his eye on crypto miners, many of whom leveraged their balance sheet at breakneck pace to quickly scale and take advantage of this 21st century digital gold rush. The stocks of publicly-trading crypto miners including Marathon Digital Holdings and Riot Blockchain are down more than 60% year to date.”

Finishing With Tether For Some Reason

Without warning or apparent reason, the Forbes article ends with Sam Bankman-Fried’s thoughts on Tether. “I think that the really bearish views on Tether are wrong…I don’t think there is any evidence to support them,” he says.

Featured Image by 41330 on Pixabay| Charts by TradingView

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Bitcoin At $20K Could Be ‘New Bottom,’ Commodity Expert Suggests, And Here’s Why

Bitcoin has been increasingly in a shaky state and has dropped by as much as 50% compared to its previous all-time high. All eyes are on the crypto alpha dog, watching its next price movements. 

On the other hand, many market analysts believe that the drop in BTC trading value is a jumping board towards massive growth. 

As a matter of fact, Mike McGlone, Bloomberg Intelligence Senior Commodity Strategist, on his recent tweet, said that the crypto’s plunge is normal as the coin is still trying to get the hang of it as it faces a massive test.

Suggested Reading | ‘Original Bitcoin’ Makes Surprise 24% Climb As Crypto Markets See Red

Bitcoin Decline – An Unnecessary Evil?

McGlone posted via Twitter saying:

“$20,000 Bitcoin may be the new $5,000. The fundamental case of early days for the crypto’s adoption vs. diminishing supply may prevail as the price approaches too-cold levels. It makes sense that one of the best-performing assets in history would drop in 1H.”

McGlone has always been extremely bullish about BTC believing that the king of cryptocurrency will regain its dominion and power as the most important crypto investment. In fact, the senior commodity strategist believes that once the market has stabilized, Bitcoin is set to outperform all other crypto assets.

Bloomberg Intelligence Senior Commodity Strategist Mike McGlone. Image: Elevenews.

Further, the finance experts states that BTC can’t be classified as an asset but rather a collectible. McGlone firmly stands by his own price projection that Bitcoin will reach $100,000 by 2025 and its current dip or correction is attributed to the worsening inflation. 

The majority of crypto fund managers surveyed by financial services firm PWC believe that the price of bitcoin will be between $75,000 and $100,000 by the end of the year.

The data in the report comes from a survey of 77 crypto hedge fund managers conducted in April, PWC said, adding that their total assets under management for last year amounted to $4 billion.

While McGlone has maintained his bullish stance, other crypto market strategists like Peter Schiff believes otherwise. Schiff sees Bitcoin’s decline as it is and says that it’s the long-anticipated bubble burst that is bound to make the market bleed.

BTC total market cap at $415 billion on the daily chart | Source: TradingView.com
BTC Trying To Stay Above $20K Critical Line

Currently, BTC trades at $21,200 and trying to stay above and thriving beyond $20,000. The frontrunner in crypto has also led all other cryptocurrencies in shaving off as much as $360 billion in just one week. 

Bitcoin’s price seems to do a free-fall trajectory as it nears the critical $20K level. BTC is said to be technically oversold as it has recently breached the $30K support level and going down with increased momentum and two things are bound to happen: either Bitcoin pulls back and goes for a bullish run — or head further down or what analysts refer to as the “bottom accumulation phase.”

Suggested Reading | Ethereum Drops Below $950 On Uniswap Overnight – Here’s Why

Featured image from The Naked Scientists, chart from TradingView.com

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Panic Vs Pandemic: Crypto Market Is More Fearful Than On Black Thursday

Following the Bitcoin and wider crypto crash, investors in the market are now more fearful than they were during Black Thursday in March 2020.

Crypto Fear And Greed Index Now Has An Extreme Fear Value of “7”

The “fear and greed index” is an indicator that tells us about the general market sentiment among crypto investors right now.

The metric uses a numeric scale that runs from zero to hundred for representing this sentiment. All values of the index below fifty imply that investors are fearful at the moment, while those above the threshold mean they are currently greedy.

Indicator values of more than 75 and less than 25 signify sentiments of extreme greed and extreme fear, respectively.

Now, here is a chart from the weekly Arcane Research report from yesterday that shows the trend in the crypto fear and greed index over the past year:

Looks like the value of the metric has plunged down in recent days | Source: Arcane Research’s The Weekly Update – Week 23, 2022

As you can see in the above graph, the crypto fear and greed index has been in the “extreme fear” territory for a while now.

In fact, this streak of extreme fear, which has been running for 57 straight days now, is the longest the indicator has ever observed.

Related Reading | Has Bitcoin Hit Bottom Yet? Here’s What On-Chain Data Says

Also, at the time the report was released (which is yesterday), the index had a value of 8, which was the lowest value since March 2021.

This sentiment was actually worse than the Black Thursday event from back then (which occurred due to the COVID-19 pandemic).

Today, the crypto fear and greed index has further dropped in value, now showing just 7.

The sentiment in the crypto market now seems to be the worst it has been since 2019 | Source: Alternative.me

Historically, extreme fear periods have been when coins like Bitcoin have bottomed out, and extreme greed stretches has been when tops have tended to form.

Because of this, some investors consider very low sentiment values to be ideal buying opportunities. As Warren Buffet’s famous quote says, “be fearful when others are greedy, and greedy when others are fearful.”

Related Reading | Here’s What Would Happen If Bitcoin Breaks Below $20K, Arthur Hayes Predicts

The report notes, however, that while buying has been profitable in such times before, catching a falling knife like now isn’t an easy task.

BTC Price

At the time of writing, Bitcoin’s price floats around $21.1k, down 30% in the last seven days. Over the past month, the crypto has lost 30% in value.

The below chart shows the trend in the price of the coin over the last five days.

The value of Bitcoin has crashed down over the last few days | Source: BTCUSD on TradingView
Featured image from Unsplash.com, charts from TradingView.com, Arcane Research

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Litecoin Market Cap Caves In From Bearish Trends, Sheds Over $2 Billion Last Month

Litecoin market cap crashes as triggered by the bearish movement of the crypto market. Litecoin’s market cap was down by more than 30% compared to its performance in the first week of May wherein the digital asset was in top shape. Litecoin market valuation closed the previous month at $4.82 billion; a disappointing number to say the least.

LTC was one of the cryptocurrencies that felt the blow on the eve of the crypto crash in May. The coin was down by 11.04% on Monday, dubbed the token’s most significant percentage loss by far.

Its market cap spiraled down to $3.012 billion. For comparison, note that the LTC’s highest market cap by far is at $25.609 billion.

Suggested Reading | Dogecoin Shed 91% Of Its Value Since 2021 High – A Musk Tweet To Pump DOGE?

Litecoin Shaved Off 33.59% In TCV  

Meanwhile, LTC traded between $41.200 to $48.300 in the past 24 hours. Litecoin has also declined in value, losing as much as 33.59% and traded 0.75% or around $1.135B of the total crypto volume.

The coin plunged by 89.83% compared to its all-time high, wherein it peaked at $420 on December 12, 2017.

Evidently, it started May with a bang at $96.17. May 1 had LTC soaring at a trading volume of $592.41 million, equivalent to a market cap of $6.98 billion. The crypto asset also reached a monthly high that peaked at $106.80 or on May 4.

LTC total market cap at $3.1 billion on the daily chart | Source: TradingView.com

It also tested and dipped to a monthly low on May 12 at $55.32; and consequently ended May at a trading price burrowed at $68.41. The figures reveal that LTC has dropped immensely when you look at its opening and closing prices in May.

LTC Hurt By Crypto Market Crash In May

LTC resorted to an aggressive sell-off due to the market cap disequilibrium. Like other cryptocurrencies, it is toughing it out in rough times. Many factors have triggered this rupture, such as inflation, stock market crisis, economic and political events, and increased interest in precious metals like gold, silver, and the like.

Huge transactions with LTC peaked on May 18 at 12,910, equivalent to roughly 84.31 million worth of transactions priced at $70. This generally translates to a total transaction volume amounting to $5.9 billion.

LTC opened May 18 at $72.97, which capsized at an intraday low of $66.42. The trading volume shows a remarkable decline of 33% in the market value of the coin since May 1.

Suggested Reading | Ether Drops Below $1,400, Pummeled By US Inflation And Difficulty Bomb Setback

Featured image from ITNext, chart from TradingView.com

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Investors Make For Stablecoin Hills As USDT Volume Touches All-Time High

With the market in turmoil, crypto investors are beginning to turn to stablecoins such as USDT and USDC to provide cover from losses. These stablecoins which are pegged to the U.S. dollar have been the obvious winners from the recent crash but it seems that investors are taking it one step further this time around. USDT volume across the Ethereum blockchain shows that investors are ramping up their activities in these stablecoins.

USDT Provides Much-Needed Cover

Through the crypto market downtrend, only a handful of cryptocurrencies have managed to retain their values. They were all stablecoins, and although some of them had lost their peg, the majority had been able to retain and provide some much-needed cover for investors. The sheer amount of volume of USDT being moved by investors on a daily basis is a testament to the fact that investors are converting to stablecoins to weather the bear market.

Related Reading | Market Downtrend Trigger Bitcoin Inflows From Institutional Investors

On May 12th, the volume of Tether USD being transacted on the Ethereum network reached a new all-time high. Data shows that more than $33 billion worth of USDT was moved across the network. This is significantly higher than the $24.5 billion in USDT that was transacted on February 4th, 2021, the previous all-time high.

USDT-U.S. Dollar peg at $0.9990 | Source: USDTUSD  on TradingView.com

However, the motives behind both records had been the same; investors getting out of highly volatile digital assets into an asset that offered a measure of stability. These investors did not wish to cash out their digital assets to fiat currencies just yet and assets like USDT or USDC provide the perfect place to park funds while waiting out the bear market.

Ethereum Fees Skyrocket

One thing that investors moving into stablecoins such as USDT has brought with it is increased transaction fees on the Ethereum network. With so much volume being moved across hundreds of thousands of transactions, the network is expectedly congested and as such would have to increase gas fees to be able to process these transactions.

Related Reading | Ethereum Tumbles To 10-Month Lows As Sell-Offs Intensifies

This was the case on May 12th as the network had recorded a large number of transactions. Gas fees on the network for a single USDT transaction were shown to have risen as high as $20 during this one-day period. As many as 182,000 Tether transactions had been carried out in the 24-hour period.

Despite this high demand for the stablecoin though, the market cap has not reflected this. Instead of increasing, it is down by 3.34% in the last 24 hours. Nevertheless, it remains an investor favorite as it is the largest stablecoin in the market.

At the time of writing, one USDT is selling for $0.9988, maintaining a close peg to the U.S. dollar.

Featured image from Wccftech, chart from TradingView.com

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LUNA Not Alone In Crimson: APE, AVAX, SOL, SHIB All Lose 20% In Crypto Crash

The crypto market has deep-dived to 11% in just 24 hours. It’s been in the hole or behind and most coins (led by LUNA) have been suffering major losses such as Avalanche, ApeCoin, Solana, and Shiba Inu, to name a few.

So, what’s happening here?

It’s like a ripple or domino effect that has hit one and is now derailing the rest of the cryptocurrencies. 

Not Just LUNA 

LUNA has lost 97% of its value following the major dip of UST stablecoin. The losses of other coins are not as massive as Terra but they have also suffered devastating double-digit losses over the 24-hour time frame.

Suggested Reading | Shiba Inu Vs. Dogecoin And LUNA: Which One Will Survive The Crypto Carnage?

Altcoins In The Red

Most altcoins are in the red at this time. It’s a major blow in the crypto space and people are trying to analyze their cards. Avalanche has plummeted to 34% or under $32 and it even crashed below $28 which is far worse than its slump in August 2021.

More so, Solana is now down by 26% which has further dropped to around $52 as of this writing. Luna is the cryptocurrency of Terra. Following the collapse of USDT or the dollar stablecoin, Luna also suffered a massive slump at 97% or below $1.

BTC total market cap at $550.71 billion on the daily chart | Source: TradingView.com

ADA of Cardano has also slid down by 16% or $0.56 displaying tremendous dips comparable to what transpired in February 2021. Additionally, Polkadot (DOT) has also crashed to around 24% over the past 24 hours, or about $9.

Other tokens and meme coins are also extra volatile and dipping today like Dogecoin which is down 23% or $0.087 and Shiba Inu, which has lost over 27% in the past 24 hours.

Meanwhile, ApeCoin is also falling rapidly and has scraped 37% off its market value over the past day with the current prevailing price at $5.90.  The price has now plunged to 85% compared to its winning streak of $39.40 following its launch in March of this year.

Trouble In Metaverse?

Even the metaverse is having trouble Decentraland and The Sandbox have plunged to 28% or $0.85 and 28% or $1.32, respectively. These metaverse gaming tokens were selling like hotcakes especially following Facebook’s switch to Meta but are now losing out on value.

The crypto market has slumped by 11% in a quick span of 24 hours led by the king of cryptocurrencies, Bitcoin which suffered a dip of 6% or a price below $29,900. Meanwhile, Ethereum is also down to 8% or $2,180.

Suggested Reading | Bitcoin Price Crashes Below $30K As Markets Show Signs Of Paranoia

Featured image from Physics World, chart from TradingView.com

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The Crypto Price Crash Is Not All That Bad, Here’s Why You Shouldn’t Mind The Bears

Cryptocurrency prices are plummeting. According to one estimate, crypto assets have lost around $1.35 trillion ($1.9 trillion) in value since November, with some crypto price crashing by as much as 80%. Many investors are in a tight spot.

The good news is that world economy isn’t poorer. As a result, there won’t be much of an economic response to the new prices.

Crypto Price Fall Dominates Headline

The recent crypto news has been dominated by the price collapse of numerous major currencies.

Since November, the price of bitcoin has been dropping. The price of cryptocurrencies has also dropped in the last week, according to reports, due to new US regulations on digital assets. Bitcoin’s price dropped from $69,000 in November to $32,951 last week.

Bitcoin Price Chart. Source: Bloomberg

Ethereum’s price has plummeted to roughly $2,400, down from nearly $5,000 at the end of 2021. Top cryptocurrencies like XRP, Solana, BNB, and Cardano have had their value plummet by up to 30%. The big crypto meltdown of 2022 wiped out $1.5 trillion from the industry as a whole.

The impact of the cryptocurrency meltdown on the rest of the economy is minimal. The $1.5 trillion in losses is only approximately 6% of the US GDP. Second, the cryptocurrency ecosystem is largely detached from the rest of the economy. Because banks have avoided crypto, the crash has had little effect on the financial market.

Many have held on to the believe that US regulations contributed to the bloodbath. Due of the national security risks posed by Bitcoin, the Biden administration is attempting to develop a strategy to regulate cryptos.

As a result of the Federal Government’s measures, traders have been urged to sell their Bitcoin holdings in large numbers.

The US Federal Reserve’s policy changes have an impact on Bitcoin pricing.

The Federal Open Market Committee will raise the double monthly rate, cutting asset purchases, according to Federal Reserve Chair Jerome Powell. The Federal Reserve implemented these steps in order to curb inflation and its detrimental influence on Bitcoin prices.

Geopolitical disputes can also have a negative impact on the market. Geopolitical disputes can also have a negative impact on the market. Kazakhstan recently faced electricity shortage due to internal crisis. Widespread tensions are also building between Ukraine and Russia.

Related article | Bitcoin Bears To Resume Assault? Why BTC Could Crash To $33K

Ending January In Confusion

As the month closes, many investor are in cautious optimism. However, inflows have turned positive since last week.

According to CoinShares, digital asset investment products received $19 million in cumulative inflows last week. With $22 million and $32 million in inflows, respectively, bitcoin and multi-asset funds led the gains.

The news wasn’t all good, as Ethereum continued to face unfavorable sentiment, with $27 million in outflows. This was the eighth week in a row that ETH-focused funds have seen outflows. Outflows were also recorded during the week for Solana, Polkadot, and Cardano products.

Since December, institutional investors have been selling digital asset products in droves, taking profits and reducing their stakes during market selloffs. According to CoinShares data, Bitcoin funds have suffered a net outflow of $131.8 million so far this year. There have been $111.2 million in withdrawals from Ether funds.

Bitcoin dropped as much as 2.9% to roughly $36,680 on Monday before recouping losses. It has now dropped more than 18% in a month, the worst start to a year since 2018’s 29% drop and a bleak follow-up to December’s 19 percent drop.

BTC/USD recovers to $38k. Source: TradingView

Between November’s peak and January’s lows, Bitcoin has lost approximately half of its value. According to Goldman Sachs’ Zach Pandl and Isabella Rosenberg, this loss puts it at “the low end of the range” of large drawdowns in the past. Since 2011, the pair estimates that the coin has had five big pullbacks from all-time highs, with an average peak-to-trough fall of 77 percent. They noted in a note that the decreases continued on average seven to eight months. According to them, the highest cumulative Bitcoin fall, a loss of 93%, occurred in 2011.

Related article | Bitcoin Funding Rates Remain Negative For More Than A Week

Featured image from Unsplash.com, charts from TradingView.com, Bloomberg

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Which Cryptocurrencies Suffered The Worse Collapse Since All-Time Highs?

Cryptocurrencies all across the market have been suffering major downside since the crash. The crypto market saw a couple of hundred billions shaved off its market cap following this. Bitcoin, Ethereum, and others have all seen their value decline significantly in the space of a week. However, in all of this, some digital assets have been hit harder than others. This report takes a look at those cryptocurrencies.

Metaverse Tokens Take A Hit

The crypto market’s recent decline has been characterized by bloody streets. As expected, bitcoin’s 52% decline from its all-time high has dragged down other digital assets with it. Ethereum, the second largest cryptocurrency by market cap, is down 54% from its own all-time high. While these cryptocurrencies have seen major downsides, others have managed even more dips since then.

Related Reading | Market Sentiment Crumbles As Sell-Offs Drags Bitcoin To $33,000

Metaverse tokens which made a big splash when social media giant Facebook announced it was rebranding to Meta and entering the metaverse space, have borne some of the largest weight from the crash. These tokens which rallied to multiple all-time highs in the last couple of months have declined as high as 68% from their all-time highs.

Metaverse tokens take some of the biggest hit | Source: Arcane Research

MANA, SAND, and AXIE are some of the most popular metaverse tokens and have grown a lot in price in accordance with their popularity. However, with the market crash, they have not been able to hold up well. All of these tokens have lost over 68% since they hit their all-time highs. All three met averse tokens are down, trading at $2.27, $3.27, and $52.66 respectively.

What About Layer 1 Cryptocurrencies?

Layer 1 cryptocurrencies also took a major hit but have seen a more varied performance when compared to the metaverse tokens. Heavy hitter like Solana (SOL) and Cardano (ADA) were some of the hardest hit Layer 1 cryptocurrencies, both of them going the way of the metaverse tokens with over 68% losses since their various all-time highs. Other lesser known Layer 1 tokens have a different story though.

Related Reading | Ethereum Leaves ETH 2.0 In The Past In New Roadmap Rebrand

FTM, ONE, ATOM, and Near, popularly referred to as the FOAN, made a splash while others were suffering. Each one of these cryptocurrencies have managed to outperform the market in a time where altcoins are dumping in response to bitcoin’s decline.

A look at decentralized finance (DeFi) paints a sadder story. This space that has brought finance products closer to the average investor saw some of the highest declines. Tokens from this space have recorded as high as 80% decline since their all-time highs.

The crypto market has managed to hold up against the crash but not before losing substantial value. In total, the crypto market is now down 50% from its all-time high. It now sits at $1.686 trillion at the time of this writing.

Crypto market cap crumbles to $1.6 trillion | Source: Crypto Total Market Cap on TradingView.com
Featured image from Bitcoin Magazine, charts from Arcane Research and TradingView.com

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Crypto Market Drops Back Into ‘Extreme Fear’ As Prices Struggle

The crypto market has continued to struggle after running out of steam with its last rally. During the last lap of the year, the market as a whole is not doing too well, although prices of cryptocurrencies are way higher than they were this time last year. Nonetheless, there have been some interesting trends that have emerged with the market crash that has seen prices stagnate at this time.

The Fear & Greed Index has shown that market sentiment has gone into the extreme negative once again. With prices of top assets like bitcoin and ethereum trading below important support points, sentiment has fluctuated widely in the market but has mostly stayed in the negative. This time around, market sentiment has dropped low and landed in the ‘extreme fear’ territory.

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Crypto Market Basking In Fear

The crypto market has spent a good portion of the month of December in the fear territory. Market prices haven’t been the most favorable for the month and investors remain incredibly wary of getting into the market at such a time. Others have however seen this as a buying opportunity like in the case of MicroStrategy, which bought an additional 1,434 BTC bringing its total holdings to 122,480 BTC.

The aggregate for the month of November came out to neutral on the sentiment side of things after a tumultuous end to an otherwise wonderful beginning of the month. That has spilled into December as Christmas rolls around.

Market goes into extreme fear | Source: alternative.me

Yesterday the Fear & Greed Index had peaked at 29 on the chart, putting the market in the fear territory. This was up a bit from last week where the market spent long stretches in extreme fear. Today, market sentiment again rolled into the extreme fear territory with a low 23 on the chart.

The index being this low shows that there are low buying pressures in the market and high selling pressures. Sell-offs are still underway in various digital assets that have seen their prices dip into the red. As the market heads into the weekend which is usually characterized by low volatility, will the market be able to pull itself out of extreme greed?

Bitcoin, Ethereum Suffer Losses

Bitcoin had made a splash in the market when it had hit its new all-time high slightly above $69,000 at the beginning of November. This had sent the crypto market on what would be a memorable bull run as Ethereum came close to hitting the $5,000 mark not too long after. But this would only be short-lived as the downtrend had begun not too long after.

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For Bitcoin, the digital asset had lost as much as $10,000 in a single day that sent it towards the low $40,000s. Ethereum on the other hand had held out for a while but succumbed to the downtrend in time.

Bitcoin is now trading well below $50,000 after failing to hold above this price point this week. Ethereum is now trading below $4,000, a crucial support point for the digital asset. At the time of writing, bitcoin is trading at $47,141 and ethereum is trading at $3,826.

Crypto total market cap at $2.16 trillion | Source: Crypto Total Market Cap on TradingView.com
Featured image from Bitcoin News, chart from TradingView.com