Get the weekly summary of crypto market analysis, news, and forecasts! This Week’s Summary The crypto market ends the week at a total market capitalization of $1,48 trillion. Bitcoin increased by nearly 5% to reach around $40,000. Ethereum is up by almost 4% to cement its price above $2,100. XRP lost almost 1% in value this week. Almost all altcoins are trading in the green, with some exceptions. The DeFi sector increased the total value of protocols (TVL) to around…
The recent trend of big-money traders and institutions investing billions in cryptocurrencies has led to a sudden spike in their values.
However, the mounting interest in crypto has sparked a major correction to take the steam off the hot market, with investors currently scrambling to close or top up their positions.
According to David Lifchitz, CIO for trading firm ExoAlpha, the entire crypto space was likely to face intense turmoil due to the overheated market conditions.
That retracement came on February 22, resulting in a market-wide sell-off that has so far wiped out $300bn off the total market cap of all cryptocurrencies.
Let’s analyze some of the top-10 digital assets most affected by the ongoing crypto market crash.
Bitcoin Plummets Below $48K
The highly volatile nature of BTC is again on full display after the coin crashed spectacularly just a day after hitting a new lifetime high of $58,400. The BTC price has shed about $11,000 of value in the last 24 hours alone as it endures what seems to be an overdue retracement.
eToro analyst Simon Peters had recently predicted the ongoing intense correction, citing that the BTC rally was overstretched.
Bearish comments from U.S. Treasury Secretary Janet Yellen, who warmed that BTC was extremely inefficient for transactions, may have exacerbated the fall.
According to one crypto analyst and trader, the current pullback is just a healthy reset of the market, which is currently flooded by excessively leveraged long positions.
Despite the king coin losing more than $100 billion from its market capitalization in a day, the bulls are expected to take control of the coin’s price action once the market cools off.
ExoAlpha CIO David Lifchitz recently forecasted a 15% correction as part of an organic market cycle before bitcoin the bulls broke out to new highs. Therefore, the current pullback will likely be limited as lower prices continue to attract buyers.
Altcoins and DeFi Tokens Bleed Out
As BTC swiftly continued to lose altitude on Monday, most alternative coins bore the brunt of the market carnage. Ethereum declined heavily in sync with the king coin over the past few sessions, shedding as much as 26% to hit lows of $1,508.
The selling continued on February 23, with prices dropping to lows of $1480 per data from CoinMarketCap. The ETHUSD pair has now wiped over $500 from its recent historic high of $2,040 set two days ago. However, the positive sign is that bulls aggressively buy the dip and are likely to sustain the altcoin’s recent upward momentum.
The drop in ETH and BTC prices over the past 24 hours has created tailwinds that have dragged down the crypto market’s other top assets, including ADA (-16%), XRP (-21%), DOT (-16%), LTC (-17%) and LINK (-27%).
Other major digital assets also posted heavy losses during today’s larger sell-off, including Stellar, bitcoin cash, and dogecoin.
As seen in the chart above, most of the cryptocurrency market is trading well in the red, which is typical during a sharp market-wide correction. That said, a few coins are still trading in the green, such as DAI, LEO, and XEM.
Could This Trend be Similar to the One in the 2020 Market Crush?
Historically, February and March have been the bloodiest months for the crypto space, where short-term trends come to an end for most crypto assets. Last year, BTC fell from $20K to $5,800 in February and rebounded slightly just before Black Thursday struck.
During that infamous March 13 crash, BTC plunged from $10K to $3,800 in hours alongside most other cryptocurrencies, stocks, and other assets such as oil and gold.
However, top DeFi analyst Darren Lau predicts that the markets won’t bleed out as much as they did in the last year, likely due to growing institutional adoption of the nascent crypto space.