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$100 billion wiped from the crypto market in under a week

$100 billion wiped from the crypto market in under a week

Despite gathering significant momentum in the final quarter of 2023, the crypto market entered the New Year with a bit of a limp. 

On the one hand, the world’s major cryptocurrencies have, as a rule of thumb, remained close to their December highs – and significantly above the prices seen throughout the bulk of the “crypto winter.”

On the other hand, the first weeks of 2024 were marked by price corrections, sudden drops, and significant volatility.

A major event and the focal point for much of the conversation has been the approval of the first spot Bitcoin exchange-traded funds (ETFs) in the United States. 

The approval, coming after a period of uncertainty and even a false message that was sent out after the SEC’s X account was compromised, initially sent Bitcoin price surging and after the official approval it briefly retested $49,000.

The world’s foremost cryptocurrency, however, quickly corrected and, by press time, stands at $42,882 – meaning it had declined 2.92% since the start of the year.

BTC YTD price chart. Source: Finbold

Crypto market cap falls on BTC ETF approval

Multiple other cryptocurrencies – including XRP, Solana (SOL), and Polygon (MATIC) – followed a similar pattern, seeing a brief yet significant surge near January 10 – the ETF approval day – before noticeably retracing.

The total market cap of all cryptocurrencies fell by more than $100 billion in less than a week from its current yearly high of $1.86 trillion, reached on January 10, to $1.75 trillion on January 16.

Crypto market cap 7-day chart. Source: CoinGecko

Out of the total figure for the period, Bitcoin alone accounted for more than $60 billion – though its decline from the current 2024 peak market cap of almost $958 billion achieved on January 11 is even more staggering and amounts to $110 billion at the time of publication.

BTC market cap 7-day chart. Source: CoinGecko

Ethereum moves against the grain

While still following the rough pattern observable in the crypto market – a significant rally near January 10 and a subsequent decline – Ethereum (ETH) has, in several ways, risen above most other major cryptocurrencies in 2024.

Overall, it remains in the green for the year, having surged by 7.42% since January 1 to the price of $2,540.58 at the time of publication.

ETH YTD price chart. Source: Finbold

Similarly, while its market cap on January 16 is $18 billion below the current 2024 high, it remains, at $305 billion, significantly above the $277 billion it stood close to on New Year’s Day.

Partially due to its leading position among smart contract platforms and partially due to pending technical upgrades such as “proto-danksharding” – an upgrade that will significantly lower transaction costs while improving throughput – a strong air of optimism prevails in the Ethereum community.

ETH technical analysis recommendations. Source: TradingView

Technical analysis only reinforces such a view on Ethereum as a summary of 1-month gauges retrieved from TradingView ranks the cryptocurrency as a “strong buy” overall. 1-week and 1-day gauges paint a similar picture as they also position ETH as either a “buy” or a “strong buy.”

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