A Friday frenzy of sell-offs, led by Cardano’s plunge, sent altcoin prices into turmoil. – Photo: Shutterstock
A Friday frenzy of sell-offs rattled altcoin prices, ending two weeks of relative calm in the cryptocurrency market.
Prices fell across the board as analysts struggled to pinpoint the source of the downturn. STEPN (GMT) and Filecoin (FIL) were the biggest losers, as they both fell about 17% around the time conventional markets in North America shut down. (All numbers are based on data from CoinMarketCap.)
What is your take on ADA/USD?
Vote to see trader sentiment!
Market mood:
Try ADA/USD
Start trading
or
Try the demo
GMT to USD
No flash crash
Numerous coins — including FLOW, NEAR, QTUM, and Apecoin (APE) — suffered double-digit percentage declines. But this market-wide drop differed from others earlier this year in that it wasn’t tied to a major cryptocurrency’s financial collapse or other major event.
“It doesn’t show the pattern of a flash crash as assets didn’t immediately rebound sharply but instead slumped even lower in the hours that followed,” Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, told CNBC. “It seems likely that this was the result of a large sales transaction, in the absence of other, more external, factors.”
FIL to USD
Cardano crashes first
According to Streeter, the Cardano blockchain’s ADA coin crashed first. The drop comes after prominent tech developer Adam Dean said in a tweet on Thursday that Cardano’s Vasil hard fork testnet, or testnet, was “catastrophically flawed” due to a failure in one node.
Dean is a former Cardano stake pool developer.
As Capital.com recently explained, Vasil is one of two major hard forks in development alongside Ethereum Merge. Decred recently completed a hard fork.
After ADA tumbled, Bitcoin (BTC), Ether (ETH), the main coin on the Ethereum blockchain, and then smaller coins like Dogecoin (DOGE) also fell.
Sector has withstood difficulties
The crypto sector had easily withstood recent troubles like the Nomad Bridge hack, US government sanctions on crypto mixer Tornado Cash, and Singapore-based lender Hodlnaut’s decision to freeze withdrawals, swaps, and deposits.
This calm reaction contrasted with price implosions that resulted the Crash of the Celsius networkand similar financial problems that other crypto lenders have experienced Voyager Digital and hedge fund operators Capital with three arrows.
Fresh Cold descends
Streeter told CNBC that the “fresh cold” dropped on Friday amid fears the market is headed for a crypto winter. Many other observers have hinted that crypto winter is already here.
Another analyst suggested that macroeconomic factors and concerns about further Federal Reserve (Fed) rate hikes may also have impacted crypto prices.
“US stock markets have retreated since the July Fed minutes were released on Wednesday, with the key takeaway being that the Fed is unlikely to be done raising rates until inflation is broadly tamed, and there is no projections for future rate hikes either,” Simon Peters, a crypto market analyst at eToro, told CNBC.
“Given the close correlation between US stocks and crypto over the past few months, I suspect this has trickled down to crypto markets and that’s why we’re seeing the sell-off. The trend may also have been exacerbated by the liquidation of long positions in the bitcoin perpetual futures markets.”
Citing Coinglass data, Peters told CNBC that Friday saw the largest liquidation of long futures positions since March 18.
Volatility rocks the market again
Market leaders bitcoin and ether dipped below $22,000 and $1,800 respectively – after holding slightly above these levels for the past few days. Bitcoin had briefly surpassed $25,000 and Ether had briefly surpassed $2,000.
“Although bitcoin is still a long way off its June lows below $19,000 at $21,800, volatility is shaking the market again,” Streeter told CNBC.
achieve more
Comments are closed.