With the exception of stablecoins, other digital assets are still trading in the red
The global crypto industry saw huge losses in Tuesday’s trading session and is still in a sea of red for now. Almost $300 billion of market capital has been wiped off in the sector in the last 48 hours, with the sector’s combined value dropping from highs of $2.885 trillion on Monday to $2.581 trillion as of writing.
The prices of many cryptocurrencies, including Bitcoin, have fallen in what has been a widespread plunge. The flagship crypto erased most of its gains from last week as it retreated from its all-time high zone to around $58,700 on Tuesday before clawing its way back and finding stability around the $60,000 mark where it is currently swinging around.
Market outlook
Only Tether and USD Coin traded in the green on Wednesday at 01:45 UTC, according to data from coinmarketcap.
The world’s leading cryptocurrency has lost about 10% over the last 7 days and is trading at $60,713 – down 2.54% in the last 24 hours. Ether showed a similar trend, having lost 3.11% in the past 24 hours to settle at $ 4,222. The native Ethereum blockchain token has now lost almost 11% in the past 7 days.
Binance Coin, which sits third among tokens with the highest market value, traded at $590 on Wednesday morning – 5.49% below its closing price on Tuesday. The pattern is the same for Solana, Cardano, and XRP, which have lost 3.81%, 2.54%, and 3.34%. The latter two have double-digit negative 7-day changes at 15.68% and 11.95%, respectively.
Polkadot and Dogecoin have also charted a similar path. Polkadot posted one of the biggest 7-day changes among the top 10 cryptocurrencies, losing 9.37% in that time frame. The picture is no different for the cryptocurrency meme, which is deep in the red with a negative change of 12.6% over the same time period. Both have lost 4.35% and 3.85%, respectively, in the past 24 hours.
Other tokens outside the scope of the top cryptocurrencies are feeling similar losses. Terra, Litecoin, Chainlink, Bitcoin Cash, TRON, and VeChain have all lost between 6% and 10% in the last 24 hours.
What was the reason for the withdrawal early Tuesday?
Crypto analysts have not identified a specific impetus behind the market crash, but the majority agree that the crypto’s recent position in the Chinese crypto landscape has massively contributed to the fall. The Chinese state planner yesterday revealed that authorities will continue their crackdown efforts as the government seeks to eradicate the mining of digital assets.
The state planner, the National Development and Reform Commission, maintains that crypto mining consumes a lot of energy and causes environmental pollution, and the activity has no significant contribution to the development of the industry. This is the rationale behind the move to curtail the mining of digital assets.
What’s the next step in the market?
Traders do not seem very worried despite the intense selling pressure and the sharp correction that followed. The two major cryptocurrencies have both fallen from their highs, but confidence in tokens to rebound is high. The general consolation is that the plunge was not specific to tokens but rather swept across the entire market.
Besides, many crypto holders understand the volatile nature of the crypto sector and, as such, aren’t shocked about the recent price movements. They contend that the latest dip is a breather rather than a prolonged sell-off, with some considering it an entry point into the market. Traders have generally resorted to the cautious wait-and-see approach before making their next move. It remains to be seen how the sector will perform for the rest of the week and whether or not the tokens will shake off the losses soon.
