As The Bitcoin Price Holds, These Smaller Tokens Are Still Crashing—Erasing $100 Billion Of Crypto Value
Bitcoin and cryptocurrencies have been sent into a tailspin during the last few days as a fresh China cryptocurrency crackdown sparks fear among traders.
The bitcoin price has managed to hold over the closely-watched $30,000 per bitcoin level, falling to lows of $31,160 on the Luxembourg-based Bitstamp exchange before clawing back some ground. The bitcoin price is now around 50% off its all-time high of almost $65,000 set in April.
Meanwhile, other smaller cryptocurrencies that have outperformed the bitcoin price in recent months, have collapsed—with the likes of meme-based dogecoin, ethereum rivals polkadot and solana, Ripple's XRP, and buzzy token safemoon—still in freefall.
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Dogecoin, the crypto pet project of Tesla billionaire Elon Musk, has dropped almost 40% in the last week and is down some 72% from peak reached ahead of Musk's much-hyped appearance on comedy sketch show Saturday Night Live in May.
The dogecoin price has lost 20% in the last 24 hours, compared to a 1% bitcoin price fall. Meanwhile, safemoon, a new cryptocurrency that's been called a Ponzi scheme even by some of its own investors, is down 11% over the last 24-hour period and 30% down from its all-time high, set last month.
Elsewhere, ethereum rivals polkadot and solana and Ripple's XRP payment token have all continued their descent after racking up triple-digit percentage gains in recent months.
As the dust settles on the latest bitcoin and cryptocurrency price crash, those in the bitcoin industry are examining what led to the sell-off and where the market goes from here.
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"There are multiple reasons for [bitcoin's] near-term weakness, including fresh strength in the U.S. dollar because of hawkish Federal Reserve, China accelerating ban on crypto-mining firms and blocking banking services for crypto firms, and a lack of institutional interest in crypto," Pankaj Balani, the chief exectutive of the Singapore-based bitcoin exchange Delta, said in emailed comments.
"Having said that, we believe that there is not much downside for bitcoin in the short term as we trade near the bottom end of the $30,000-$42,000 range. In the short term the macro environment does not look weak with broader markets continuing to rally and U.S. tech stocks posting all time weekly highs. We expect bitcoin to bounce from here and challenge the $40,000 mark again in the coming weeks. $30,000 is the key level for traders to watch—a conclusive breakdown below $30,000 might be coupled with heavy selling activity in bitcoin and entire crypto market."Source