Cryptocurrency market faces identity crisis after historic plunge
Over the past week, the total market capitalization of the crypto sector has dropped by a whopping 25%
- Top 5 cryptos like BTC, ETH and BNB continue to face major losses, though some altcoins are currently soaring in value.
- ADA, DOT, MATIC, SOL have showcased gains of 26%, 10%, 131% and 13% over the previous two weeks.
- Despite Bitcoin’s shrinking market dominance, experts believe cryptocurrency will continue to shape the industry’s overall trajectory.
The past seven days have been quite volatile for the global cryptocurrency market, with a majority of the coins in the top 10 facing massive selloffs.
Since May 12th, the total market capitalization of cryptocurrencies has continued to dip rapidly, showcasing a downturn of over 25%.
But in the midst of all this negative price action, it appears that an increasing number of altcoins are continuing to gain financial traction.
One major factor that may be causing altcoins to rally is that Ethereum’s average transaction prices remain a problem, causing many DeFi users to look for alternatives.
Average transaction fees on Ethereum recently scaled up to a whopping $75, with some users reportedly having paid more than $200 for a single transaction.
Providing his views on the existing situation as well as what lies ahead for the industry, Petr Kozyakov, cofounder and CEO at the global payment network Mercuryo, told Finder that as the market strives to find its footing amidst all the craziness, there are some interesting developments to keep a note of, adding:
“While Bitcoin is notably leading the freefall, many altcoins are either showing resilience to the downtrend or charting a new bullish path for themselves. Over the past week, Cardano, MATIC, Solana, and some altcoins have shown this bullish trend against the broader market moves.”
In his view, various altcoins are gaining traction quickly since an increasing number of investors are now looking inwards into multi-functional blockchain infrastructures, with use cases ranging beyond simply funds transfers. “Some altcoins qualify in this regard as they brandish innovation, useability, security and a framework for DApps and smart contracts,” he added.
The market is evolving, fast
Recent trends related to the cryptocurrency industry seem to indicate that the market is slowly but surely speeding past the point of consolidation and tilting toward an imminent bearish slowdown. In this regard, Konstantin Anissimov, Executive Director at cryptocurrency exchange CEX.IO, told Finder:
“The excuse for this continuous offloading of Bitcoin is tightly linked to Elon Musk and Tesla’s announcement of scrapping their earlier embrace of BTC. That said, while Bitcoin’s dominance has dropped to 40%, events surrounding the coin still shape the broader market at large.”
Anissimov is of the mindset that the industry is just going through another cyclical upheaval, but business should soon return to normal fairly soon, especially as the amount of institutional money coming into this space continues to increase with each passing day.
Interested in cryptocurrency? Learn more about the basics with our beginner’s guide to Bitcoin, dive deeper by learning about Ethereum and see what blockchain can do with our simple guide to DeFi.
Disclosure: The author owns a range of cryptocurrencies at the time of writing
