Crypto Market Crash Wipes Altcoin 2024 Gains
07 Aug, 2024 ● Crypto News
More than half of the 50 largest cryptocurrencies by market capitalization have turned negative following the most significant crypto sell-off in over a year.
The entire crypto market saw a $510 billion drop in total market capitalization.
According to CryptoQuant author Binhdangg, over 60% of the top 50 cryptocurrencies lost all the gains made during 2024 after the sell-off, as noted in an Aug. 6 X post:
“After Black Monday, 60% of coins in the top 50 have removed all profit since the beginning of 2024 and even get losses.”
Following the sell-off, Ether briefly dropped to a five-month low below $2,200. Losing this key level could trigger more panic selling and further downside pressure across the market.
The severe crypto market sell-off was driven by a combination of macroeconomic and industry-specific factors.
On Aug. 5, the Bank of Japan announced an interest rate increase from 0% to 0.25%.
Japan’s decision had a direct impact on the United States stock market and Bitcoin price, as traders had borrowed Japanese yen at low interest rates to invest in US assets.
Additionally, five of the top market makers sold a total of 130,000 Ether worth $290 million at current prices since Aug. 3, causing Ether’s price to drop from $3,000 to below $2,200.
The market makers include Wintermute, which sold over 47,000 ETH, followed by Jump Trading with over 36,000 ETH, and Flow Traders in third place with 3,620 ETH.
This Ether selling by market makers has significantly contributed to Ether’s price decline.
Among the 50 largest tokens by market capitalization, some of this cycle’s most popular memecoins have taken the biggest losses.
On the weekly chart, Solana-based memecoin Dogwifhat (WIF) experienced the largest loss, falling over 41% during the past week to trade at $1.38 as of 8:37 am UTC on Aug. 6, according to TradingView data.
Frog-themed memecoin Pepe saw the second-largest weekly loss, falling over 34% to $0.057781, which is over 53% down from its all-time high recorded at the end of May.
Since memecoins lack intrinsic value, their price increases are primarily driven by social media hype and attention from retail investors.
As a result, meme tokens are often the hardest hit during a crypto market correction.
Sources:
https://cointelegraph.com/news/top-50-cryptos-lose-2024-gains-510b-selloff
