Altcoins suffer heavy losses as Bitcoin drops below $59k

On August 28, most altcoins, including Fantom, Sui, FET, and Lido DAO, experienced double-digit declines, while the largest crypto asset, Bitcoin, experienced a 6 percent drop in the past day.

At the time of writing, Fantom (FTM), a scalable blockchain platform for DeFi, is down 14% in the last 24 hours. During the same time frame, the daily trading volume of its crypto assets hovers around $294 million, while its market cap has fallen 14% and currently stands at $1.219 billion.

Sui (SUI), the native token of the Sui blockchain network, also changed hands at $0.8302, down 11.8%, according to crypto.news data. The token’s daily trading volume during the same period was $343 million. Meanwhile, the crypto asset’s market cap fell to $2.16 billion, making it the 44th largest cryptocurrency, according to CoinGecko.

The Alliance for Artificial Superintelligence (FET), a partnership between blockchain networks Fetch.ai, SingularityNET, and Ocean Protocol to create decentralized AI, is also being affected by recent Bitcoin price action. At press time, it was down 13.7% over the past 24 hours, trading at $1.22 with a daily trading volume of $525.6 million. The token’s market cap has fallen to $3 billion.

Lido DAO (LDO) was also seen in the red with a 13% drop and was trading at $1.04 at press time. The token also saw a drop in market cap to $938 million, with a daily trading volume of $109.3 million. The crypto asset fell to the 80th spot among the top 100 leading cryptocurrencies.

Bitcoin falls below $59,000

Due to Bitcoin’s significant influence and market dominance, a sharp decline in the altcoin market is often associated with Bitcoin’s performance. Significant price declines tend to create a ripple effect in the cryptocurrency market, leading to widespread declines in altcoin values ​​as investor confidence wanes and market sentiment turns bearish.

Bitcoin (BTC) fell 6% in the last day to $58,609 on the morning of August 28. Its 24-hour low and high were recorded at $58,059 and $62,963 respectively. Also, the Fear & Greed index currently stands at 30, which suggests that the crypto market is in a state of fear, according to data from Alternative.

A recent report from Glassnode suggests that Bitcoin’s recent price decline is linked to the market reaching a stable state that may not last long. The report focuses on the MVRV ratio, which measures whether Bitcoin holders are making a profit or loss by comparing the current market price to the price at which the coin was last traded.

Recently, the MVRV ratio has been hovering around its long-term average of 1.72, a level that typically signals a crossover between a bull and bear market. This suggests that investor profitability has leveled off after the initial excitement around Bitcoin spot ETFs, leading to a cooling in the market and contributing to the recent price decline.

Some analysts attribute Bitcoin’s recent price decline to escalating Russia-Ukraine tensions, where risky assets like Bitcoin are often among the first to sell.

However, crypto analyst Ash Crypto suggested that smart money has been accumulating Bitcoin between $50,000 and $65,000, expecting an exit once the accumulation phase is over, likely by the end of September.

BTC price and RSI chart – August 28 | Source: crypto.news

Bitcoin’s Relative Strength Index currently stands at 44.56, suggesting that Bitcoin is neither oversold nor undervalued at its current price level.

Bitcoin’s funding rate also dropped to negative 0.004%. This sudden change is usually indicative of an increase in the number of trades betting against Bitcoin’s price, and this comes after $96.5 million worth of liquidations were made in the last 24 hours.

Historically, such a sudden change in an asset’s funding rate usually leads to a price move in the opposite direction. In Bitcoin’s case, this could mean a short-term price recovery.

The cryptocurrency market experienced a total liquidation of more than $320 million over the past day, of which $285 million was wiped out from long positions and $35 million from short positions.