- Cryptocurrency markets are witnessing a downturn, with Solana and Avalanche tokens, including Bitcoin, experiencing significant losses amid institutional sales and ETF-related pressures.
- Short-term Bitcoin holders are grappling with over 50% of their profits being wiped out, raising concerns of potential further market corrections and a possible drop in Bitcoin to $38,000.
In the ever-volatile world of cryptocurrency, recent market trends have left short-term Bitcoin holders reeling as over half of their accumulated profits evaporated, according to a note from Bitfinex analysts. As institutional sales tied to newly launched exchange-traded funds (ETFs) cast a shadow on Bitcoin prices, major tokens like Solana’s SOL and Avalanche’s AVAX experienced a significant downturn, with losses exceeding 20% in the past week.
The ETF Effect: Institutional Sales Weigh on Crypto Giants
Solana’s SOL witnessed a 7% drop, while Avalanche’s AVAX slid 9% in the last 24 hours. This reversal follows a December rally fueled by meme coins, propelling both ecosystems to yearly highs. However, recent market dynamics have erased those gains. Notably, Solana’s meme token, BONK, plummeted by 10%, and JOE, the token of Avalanche-based decentralized exchange Trader Joe, saw a 12% decline.
Dogecoin (DOGE) retraced its weekend surge from 6 to 9 cents, prompted by speculations surrounding its integration into social application X’s upcoming payments service. The CoinDesk 20, a liquid index tracking top tokens by capitalization, reflected an average decline of 4% in the broader crypto market.
Green Shoots Amidst the Red: FTX’s FTT and Uma Network’s UMA
Despite the downturn, a few tokens defied the trend. FTX’s FTT, buoyed by revival hopes, and Uma Network’s UMA, which attracted attention from market influencers ahead of an imminent product launch, were among the select few in the green.
In a note, analysts at Bitfinex highlighted that the recent Bitcoin slump wiped out gains for short-term investors, with realized losses surpassing $43,000. This development has led to an exodus from the market, particularly among those who entered the BTC space less than a month ago.
Market Jitters: Short-Term Holders Brace for Impact
The analysts warned, “Such a substantial decrease in average profits for short-term holders can be a precursor to selling pressure or exit liquidity.” As market sentiment sways towards further corrections, mirroring expectations of Bitcoin dropping to $38,000 in the coming weeks, the crypto community holds its breath, navigating through the stormy seas of uncertainty.