Bitcoin, Ethereum, Solana crash up to 30% in a week. Is there more pain coming?

New Delhi: The cryptocurrency market has come under immense pressure, with a sharp fall seen in crypto prices in the last one week, thanks to escalating geopolitical worries between Russia and Ukraine, red hot inflation data, rising prices of energy and a surge in bond yields.

In the last 24 hours alone, the global market cap has tumbled more than 5 per cent to $1.85 trillion. It was over $2.05 trillion a week ago. That said, the volumes have remained strong in the digital token market.

Crypto tokens fell ahead of Tuesday’s US Consumer Price Index report, said OKX research team.

Largest tokens such as Bitcoin and Ethereum have dropped about 5 per cent in the last 24 hours, extending their weekly slide to 15 per cent each.

Altcoins among the 15 largest crypto tokens such as Solana, Terra, Avalanche, Polkadot and XRP have tumbled up to 9 per cent in the last 24 hours, registering a weekly fall of up to 30 per cent.

Meme tokens such as Dogecoin and Shiba Inu have also been under pressure. Despite Elon Musk’s push, Dogecoin has plunged 10 per cent in the last one week, while Shiba Inu is down by 16 per cent in the same period.

Pratik Gauri, Founder and CEO, 5ire said that cryptos are going through a winter after every price recovery. “Both the Russia-Ukraine war and the West’s response to it are major factors behind the fall. These factors will continue to influence crypto investments, which of course is an extremely volatile asset class,” said Gauri.

Other market participants said that the selloff is also intense as there are global obligations to pay taxes in the latest weeks.

This is the time when people sell some of their holdings as they need to pay the income taxes for the year ending December 31, 2021, in counties like the US, Australia, the UK and Europe, said Sathvik Vishwanath, Co-founder & CEO, Unocoin. “This does not look like a long bearish market yet.”

Market participants believe that Bitcoin may take more than expected time to hit $50,000 again and for now, it will hover around the $40,000 mark. However, they do not reject the idea of buying on dips.

“Most crypto investors buy crypto motivated by ‘fear of missing out’ or FOMO. There are plenty of opportunities in the market and I’m sure we’ll get through this crypto winter with a few scratches,” Gauri said.

He also said that investors need to learn investing is a long term goal that requires discipline and one should not punt on volatile assets.

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