Crypto Market Hits Its Lowest for 2018
This week, the cryptocurrency market has seen a massive decline, losing billions of dollars in value as the price of cryptos across the board continue to plummet. Thanks to this freefall, the total market capitalization for the entire crypto market hit its lowest for this year.
US SEC Decision Triggers Market Reaction
The crypto market, which was already struggling, started its nosedive after the US Securities and Exchange Commission (SEC) postponed taking a decision on a Bitcoin ETF (exchange traded fund) proposal. This news triggered the decline which led to the total market capitalization to drop to $223.70 billion (at the time of writing), the lowest for this year, and the lowest since November 2017.
Since the news of the SEC’s delay in taking a decision broke, the cryptocurrency market’s capitalization has dropped by almost 11%.
Impact on Cryptocurrencies
Despite the fact that the SEC’s decision was solely for Bitcoin’s ETFs, it is the smaller-cap altcoins that have been hardest hit, reporting losses much worse than the world’s number one cryptocurrency. This rout is a sign of a lowered risk sentiment in the crypto market.
The fact that Bitcoin’s dominance in the cryptocurrency market is now up to 48.8% also spells bad news for the market as it indicates that investors are pulling out of altcoins and into Bitcoin, after which they could be converting their funds into fiat currencies. If investors’ risk averseness continues, then BTC’s dominance could go up to as much as 50% and the markets could see the deaths of even more small-cap altcoins.
Another indicator of a lowering risk sentiment is the widening gap between the total market capitalization (excluding BTC) and BTC’s market capitalization. This shows that investors are pulling out of the higher risk alternative cryptocurrencies. At the time of writing, the total market capitalization (excluding BTC) stands at $114.56 billion, which is an 8-month low for the cryptocurrency market.
Market in Decline
The crypto market has lost as much as $51 billion in capitalization in the last 7 days, which is an 18% decline. Additionally, the top 20 cryptocurrencies by market cap have shown massive losses in the last day and a half, losing more than 14% of their value in that time.
In the last 11 days, the cryptocurrency market has seen 10 days of declines. This kind of steady decline has not happened since September of 2014.
Vitalik Buterin, the co-founder of the Ethereum network, believes that the crypto bear market is nearing its end. However, considering the fact that the cryptocurrency market is notoriously volatile, there may be more drops in the future, before market recovery begins.