Solana (SOL) dips below $10 as Bitcoin (BTC) holders brace for fourth straight quarter of red

Broader crypto, apart from some alts, has been fairly dormant in the days following the Christmas holidays. This has consequently given enthusiastic market participants a chance to take a breather and reflect on 2022. The leading cryptocurrency, Bitcoin, resumed a mild downtrend yesterday, inspired by negative volatility after Boxing Day. As expected, most media attention this week focused on the asset’s performance relative to well-known Wall Street names, particularly those with technology investments.

Currently trading around 67% below its opening price at the start of the year, the BTC symbol is primarily the asset in focus due to its archetypal status as a digital asset. The Satoshi creation has also shown an overwhelming impact on the rest of the altcoin markets. As of today, the flagship cryptocoin is on track to print a fourth quarter red candle — marking the first appearance of this trend. Here’s what else to keep an eye on in the market:

Bitcoin exchange outflows are easing, indicating a recovery

Bitcoin is almost certain to end the year with its worst investment returns since 2018. Still, there is some consolation for investors. Ethereum saw a similar magnitude printed red candle down 70%, while electric car maker Tesla, although not a direct comparison, saw its company stock, one of the most popular and traded, plunge 72% over the period.

TSLA Stock vs. Bitcoin and Ethereum. Source: Trade View

The current Tesla stock value of $112 represents the worst low the EV marker has recorded in history and a significant gap to analysts’ price targets. Tesla’s market capital has shrunk from $1.06 trillion at the end of 2021 to $353 billion at the time of writing. Meanwhile, Meta and Alphabet shares are down 65% and 41%, respectively, since January. Coinbase’s COIN symbol, on the other hand, continued to search for lower bottoms on Wednesday, hitting an all-time low of 32.45 on the day. While spot gold hasn’t impressed — it has held the $1,800 price level — it has performed relatively better than the aforementioned shedding assets.

Gold performance versus bitcoin. Source: Trade View

Analysts have stuck to bearish short-term price forecasts, with some anticipating crypto prices to turn even lower in 2023 as equity markets are debilitated. Blockchain intelligence provider Santiment this week attributed the recent dismal BTC price action to waning interest from whale investors.

“Bitcoin’s volatile prices have a lot to do with declining whale interest. If prices continue falling and rally occurs, that would be a historically bullish signal.”

December has arguably maintained the underlying tone of crypto dips and price declines, but there appears to be some gradual relief, at least for the leading cryptocurrency. A recent update from Glassnode revealed that market participants have paused in their exodus from the market following the FTX debacle. The on-chain analytics firm noted that stock market outflows hit their lowest level in over six months ahead of its week.

Bitcoin exchange outflow. Source: Glassnode

The figures suggest that daily enthusiasts are regaining confidence in centralized exchanges. In the alternative markets spotlight on Wednesday, Holo (HOT) and Internet Computer (ICP) tokens are leading the gains, while Terra Classic, Chain and Solana are the day’s biggest losers, both posting negative double-digit 24-hour price changes.

To learn more about Bitcoin, visit our Investing in Bitcoin guide.

Terra Classic price corrects by 11% after Binance LUNC trading fee update

The descended Terra chain’s native token, LUNC, was one of the trending coins this week after seeing a price rally between Monday and Tuesday. The Terra Classic token has since corrected, shedding nearly all gains and at press time is down 11.19% over the past 24 hours.

LUNC/USDT chart. Source: Trade View

The steep drop coincides with an announcement by Binance of an adjustment to its burning LUNC token mechanism. The update now includes burning 50% of LUNC spot and margin trading fees as opposed to the total as before. The exchange team also noted that it will suspend the sharing of LUNC trading fee burn contributions until March next year, in line with community guidelines under Proposal 10983 and Proposal 11111.

Solana (SOL) price is approaching “death sentence” zone.

Elsewhere in the market, Solana’s native token has continued to deteriorate, showing signs of potential decline despite support from die-hard holders. Market data shows that the SOL token slipped below $10 for the first time since February 2021 and is now trading at a yearly low of $9.52 after losing almost 10% of its value around the same time yesterday .

Solana price chart. Source: Messari

Overall, the SOL/USD pair is down almost 20% over the past seven days. The token now has a market cap of $3.6 billion, a number that trails Litecoin, Polkadot, and Uniswap on the same metric. SOL’s 24-hour price chart is mostly red, while the YTD action chart paints an even more depressing picture for Solana enthusiasts. Analysts from Santiment commented on the price drop in a tweet, bringing to the fore the negative opinion of the crowd towards the network. Market observers have attributed the recent drop to concerns surrounding Solana and fears of a token airlift after Alameda wallets became active earlier today.

Solana’s total value has similarly shrunk, from $6.78 billion at the start of the year to $232 million on December 28. Failure to stay above the crucial $10 level and consequent move into the single digits leaves an immediate support level at around half of the current price range. Earlier this week, two of Solana’s top NFT collections confirmed plans to move away from the network. DeGods and Y00ts, both from the same creator, announced on Boxing Day that they will move to the Ethereum and Polygon chains, respectively, in Q1 2023.

To learn more about Solana, visit our Investing in Solana guide.

Learn Crypto Trading, Yield Farms, Income strategies and more at CrytoAnswers
https://nov.link/cryptoanswers