Bloomberg News reports that digital tokens maintain a status quo amidst the recent market slowdown. And this status for many long-time observers is a cause for concern, and they regard it as an ominous sign.
How is Bitcoin Behaving Differently this Time?
The dominance of the largest cryptocurrency, Bitcoin, currently in the market is below 40%. It has not oscillated much, even amidst the turbulence caused due to Sam Bankman Fried’s FTX exchange catastrophe. In the past, it has been observed that during the crest and trough cycles of the Bitcoin market, the market share percentage used to surge as the investors banked upon the most reliable digital token amidst the volatile market conditions.
Noelle Acheson, who has the newsletter “Crypto is Macro Now” to his credit, has said that the most liquid is the coin in this sector and is the least volatile among the large-cap non-stable coin tokens. During May and June, when several companies and projects wrapped amidst the turmoil in the market, the dominance of Bitcoin surged to approximately 48% and then plunged again once the investor appetite recovered.
Just one statistical point, the severity of the plunge is signaled in the digital tokens that have taken place due to the FTX bankruptcy.
The FTX exchange is regarded as a premium platform in the new space, and when it nosedived, many were taken by surprise, impacting the market confidence remarkably and tarnishing the brand’s image.
Plunging Crypto Prices
The prices of crypto have nosedived while Bitcoin hovers around $17,000, which dropped from nearly $69,000 just one year ago. In comparison to the biggest digital token, others have performed even worse. Meanwhile, liquidity dried up because Alameda Research, founded by Bankman Fried, also wrapped up.
For several participants in the market, the crash is felt differently, partially due to FTX, along with the subsidiaries being held in high regard. Some experts say that it might take several years for the industry to regain its stature, while institutional investors could keep investments in this sector at bay. The Crypto Fear and Greed Index has continued to be in the “fear” region for several weeks.
Earlier, while costs were rallying and speculations were rampant, the dominance of Bitcoin was found to wane, and at these times, alternative coins or altcoins benefited the most, with offshoots and weird projects gaining notoriety.
If you have a bearish approach, BTC does not prove to be defensive this time. But if you are bullish on the market, BTC will not pose to be a positive blockchain any longer, which also includes DeFi, NFTs, and Web 3, among other things. Jeff Dorman, the chief officer, associated with Arca, stated the same.
