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On Aug. 28, most altcoins, including Fantom, Sui, FET, and Lido DAO, experienced double-digit drops, while Bitcoin, the largest crypto asset, declined by 6% over the past day.
Market Performance
At the time of writing, Fantom, a scalable blockchain platform for DeFi, was down 14% in the last 24 hours. The daily trading volume for Fantom hovered around $294 million, while its market cap slumped by 14% to $1.219 billion.
Sui, the native token of the Sui blockchain network, dropped 11.8%, trading at $0.8302. The token’s daily trading volume was $343 million, and its market cap fell to $2.16 billion, making it the 44th largest cryptocurrency.
Artificial Superintelligence Alliance, a collaboration between Fetch.ai, SingularityNET, and Ocean Protocol to create decentralized AI, also saw a decline. It was down 13.7% in the last 24 hours, trading at $1.22 with a daily trading volume of $525.6 million. The token’s market cap fell to $3 billion.
Lido DAO experienced a 13% drop, trading at $1.04. Its daily trading volume stood at $109.3 million, with a market cap decrease to $938 million, ranking it 80th among the top 100 cryptocurrencies.
Bitcoin’s Impact
Due to Bitcoin’s significant influence and market dominance, a sharp decline in the altcoin market is often linked to Bitcoin’s performance. Substantial price drops tend to create a ripple effect across the cryptocurrency market, leading to widespread declines in altcoin values as investor confidence wanes and market sentiment turns bearish.
Bitcoin fell 6% over the past day to $58,609 on Aug. 28 morning. Its 24-hour lows and highs were recorded as $58,059 and $62,963, respectively. The Fear and Greed index currently stands at 30, indicating that the crypto market is in a state of fear.
A recent report suggests that Bitcoin’s recent price drop is linked to the market reaching a balanced state that might not last. The report focuses on the MVRV ratio, which measures whether Bitcoin holders are in profit or loss by comparing the current market price to the price at which coins were last moved.
“The MVRV ratio has hovered around its long-term average of 1.72, a level that typically signals a shift between a bull and bear market.”
This suggests that after the initial excitement of the Bitcoin spot ETFs, investor profitability has leveled out, leading to a cooling in the market and contributing to the recent price decline.
Some analysts link Bitcoin’s recent price drop to the escalating Russia-Ukraine conflict, where risk-on assets like Bitcoin are often the first to be sold off. However, crypto analyst Ash Crypto speculates that smart money is accumulating Bitcoin between $50,000 and $65,000, anticipating a breakout once the accumulation phase ends, likely by the end of September.
The Relative Strength Index (RSI) for Bitcoin currently stands at 44.56, suggesting that Bitcoin is neither oversold nor undervalued at its current price level. Bitcoin’s funding rate also dropped to negative 0.004%, indicating a rise in trades betting against Bitcoin’s price, which followed $96.5 million in liquidations over the past 24 hours.
Historically, such a sudden change in an asset’s funding rate often leads to a price movement in the opposite direction. In Bitcoin’s case, this could mean a short-term price rebound.
Overall, the crypto market experienced more than $320 million in liquidations in the past day, with $285 million from long positions and $35 million from shorts being wiped out.
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