In a sudden turn of events, the cryptocurrency market experienced a sizeable dip, presumably fuelled by profit-taking activities, particularly with Bitcoin, plunging below $30,000 during European hours on Friday. This downturn stood out as the broader traditional market sailed through the storm without significant shivers.
Notably, Solana’s SOL displayed a significant downtrend, marking an 8% drop within the 24-hour span. Similarly, Ether (ETH) suffered a 3% loss and in the same tone, XRP recorded a 6% drop. Alongside these giants, Cardano’s ADA and Avalanche’s AVAX fell 4% within the same period.
Stellar’s XLM took its investors by surprise, plummeting 6.6% despite a promising 10% rise in the past week. An interesting observation was Chainlink’s LINK, which traded flat after enjoying a 15% rise on Thursday. This surge was inspired by the introduction of its CCIP protocol earlier in the week.
Meanwhile, regulatory plays kiboshed the industry’s fluctuation. The U.S. House Republicans introduced a new digital assets oversight bill seeking to establish a regulatory framework designed to protect investors in the cryptocurrency sector. However, on a closer look, it was evident that a segment of traditional securities such as stocks, bonds amongst others were excluded from “digital assets” definition.
This ambiguity demonstrated that while cryptocurrencies such as XRP could wiggle through, DeFi was still on the hook for persecution. In fact, the regulatory powers were seemingly expanded, leaving the crypto sector on edge.
As a response to the market upheaval, the CoinDesk Market Index (CMI) fell 1.7%. This broad-based index measures the market capitalization-weighted performance of crypto market, painting a comprehensive picture of the market condition.
Finally, amidst the plummeting prices, more than $66 million worth of liquidations took place in the past 24 hours, data from Coinglass reveals. Of these, roughly 70% were long positions, a scenario where traders place bets on higher prices. This volatile environment further leaves traders at the mercy of predetermined liquidation levels, where borrowed funds are surrendered upon reaching these levels. With such turbulence, the potent mix of regulatory changes and dropping prices is expected to keep keeping the crypto sector on its toes.
Source: Coindesk
