- The drop in Bitcoin price below $59,000 has led to significant liquidations in the market, especially for altcoins.
- Analysts advise caution and suggest a pause in accumulating altcoins due to current market uncertainties and weak signals.
In a dramatic 24-hour period, the global cryptocurrency market saw a sharp drop of 4.7%, caused by a significant drop in Bitcoin value. [BTC] price, which fell below the critical threshold of $59,000.
This drop has spread throughout the market and has a major impact on altcoins.
While Bitcoin struggles to stay afloat, the altcoin sector has seen a significant drop in market cap, from $1.03 trillion at the beginning of this month to just $953 billion at the time of writing.
The recent drop in bitcoin price below $59,000 marks a critical moment in the crypto market. It reflects rising uncertainty and is causing widespread selling.
The downward trend has raised doubts about the continued health of the bull market as Bitcoin tests support levels multiple times, indicating potential market weakness.
On Crypto Banter’s “The Ran Show,” analysts said marked Bitcoin’s precarious position at the bottom of its trading range, suggesting that repeated tests of these levels could signal an impending market shift.
Stay away from altcoins
In these turbulent market conditions, experts advise traders to be cautious, especially with altcoins.
Recent patterns and market data suggest that there is a cooling-off period for altcoins, which have been significantly impacted by Bitcoin’s ongoing price adjustments.
The Crypto Banter analyst noted that altcoins typically experience recovery periods, but the current market conditions are not favorable for an immediate recovery.
Using the Pendle [PENDLE] Thus, the analyst indicated that the altcoin has seen a notable drop not because of protocol issues, but because of external pressure on the market. This illustrates the volatile nature of altcoin investments in uncertain times.
The analyst’s advice is to focus on robust on-chain data and not be influenced by volatile trends on social media.
The Crypto Banter analyst also noted FTX’s recent move, which could potentially return more money to users than was initially lost. This could signal a positive turn in market liquidity, which could support the recovery.
Comparing Bitcoin’s market cap growth to that of major financial institutions and traditional assets like gold, the analyst highlighted Bitcoin’s long-term value proposition despite short-term volatility.
Solana: A Case Study in Volatility
While the analyst advised caution with altcoins, it makes sense to investigate Solana [SOL]the third largest altcoin in the market, as a specific example of the impact of the market downturn on altcoins.
Solana has been hit hard; in the past 24 hours alone, the price of SOL has dropped by 7.3%, trading at $134.83 at the time of writing. This drop followed a brief surge linked to excitement about potential ETFs.
This drop in Solana’s value has had a significant impact on traders. According to Coin glassOver the past day, 106,449 traders faced liquidations worth a total of $289.26 million.
Of this, Solana-related liquidations totaled approximately $12.55 million, primarily from long positions. Specifically, Solana long liquidations totaled $10.76 million, compared to $1.80 million from short positions.
Source: Coinglass
Read Bitcoin’s [BTC] Price Prediction 2024-25
The downturn appears to be affecting Solana’s on-chain activity. AMBCrypto’s take on Sun scan showed a clear decline in the number of active addresses.
From over 1.2 million addresses last month, the number has dropped to 882,000 at the time of going to press, indicating that user engagement is declining given the current market conditions.
Source: Solscan