The cryptocurrency market liquidation continued on Monday, most tokens having fallen considerably in the exchanges. The Bitcoin and the Ethereum have both crossed psychological barriers, with Bitcoin going below $ 40,000 per token and Ethereum going below $ 3,000 per token this morning.
Currently both tokens are down, although losses have been limited to 0.6% and 2.5%, respectively, for Bitcoin and Ethereum in the past 24 hours.
Notably, bitcoin is outperforming the global crypto market today, which is much deeper in the red overall. The entire crypto market has lost 1.7% in the past 24 hours at noon Monday, also falling below the psychological threshold of $ 2 trillion in market capitalization.
Once again, memes such as Dogecoin lead the way in terms of losses today. Dogecoin is currently down 4.4% in the last 24 hours.
Investors seem to continue to move away from risky and growth-linked investments in favor of more defensive asset classes today. In the stock market, the Nasdaq is once again leading losses among major indexes as investors turn to safe-haven stocks. Guidance given by the Federal Reserve via its meeting report released last week continues to haunt growth-seeking investors, who are now banking on much larger and faster rate hikes than expected.
In the cryptocurrency world, the levels of “ extreme fear ” are rated by various investor sentiment gauges. For memes like Dogecoin, which depend on positive sentiment and investor interest, the current environment is not conducive to the parabolic growth trends that many investors were initially hoping for in 2022.
This macroeconomic environment is likely to test the cryptocurrency market. The price action of major cryptocurrencies over the next few months will determine whether the market is currently in bubble territory or not. We’ve seen big declines already, and this could be a further test of the resistance of these digital currencies in the long run.
For investors in more defensive tokens such as bitcoin, often referred to as “ digital gold “, The relative strength that investors are seeing again today can be viewed as positive. That said, outside of a few niche tokens, the cryptocurrency market is once again moving in high correlation, as capital flows out of the crypto world continue.