Solana, a prominent memecoins powerhouse and leading L1 blockchain network, experienced a significant loss in market cap on Monday, along with the rest of the crypto market, which saw a decline of over 4%.
The value of Solana (SOL) plummeted by approximately $3 billion, dropping to around $128. This represents a 10% decrease over the past week and is nearly 50% lower than its previous all-time high (ATH) reached in 2021.
Other major cryptocurrencies like Bitcoin (BTC), Ethereum (ETH), BNB, XRP, Toncoin (TON), and Dogecoin (DOGE) also faced losses of up to 10% in the last week amidst a widespread market downturn. The crypto fear and greed index indicated a neutral sentiment level at around 51, suggesting uncertainty among investors about the market’s direction, whether bullish or bearish.
Looking at historical patterns, it is common for the market to experience drops of 30%-40%, especially following Bitcoin halvings. Therefore, the current downward trend in the market is not unexpected.
According to TradingView, the total cryptocurrency market cap has grown by over 35% year-to-date (YTD), significantly outperforming the S&P500 index, which has only increased by 15% during the same period.
Recent reports from crypto.news show that altcoin products received inflows last week, indicating a willingness among investors and traders to “buy the dip” in risk assets.
Another factor influencing the market is the Federal Reserve’s economic control measures. Despite recent hawkish Federal Open Market Committee (FOMC) meetings, a rate cut in September is still anticipated.
There is also anticipation surrounding the Securities and Exchange Commission (SEC) approval for a spot Ethereum ETF, which is expected to drive further growth. However, proponents of decentralized finance (defi) remain skeptical about the positive impact of ETFs tracking spot prices on the on-chain ecosystem.
The recent Bitcoin halving has introduced new dynamics that are expected to create a supply shock in the market. With block rewards halved and increasing demand for spot Bitcoin ETFs, analysts predict a shortage of Bitcoin to meet rising buying pressure, leading to a surge in prices.
In conclusion, despite the market fluctuations and differing opinions from experts like Peter Schiff who preach Bitcoin FUD, the overall sentiment remains uncertain as investors navigate the ever-evolving crypto landscape.