The bears are back in town.
Following a yearlong rally, the cryptocurrency markets turned crimson on Friday as the bitcoin price began what appears to be a significant retrace.
The retreat was as precipitous as it was comprehensive. Bitcoin plunged by more than 20 percent, while dozens of altcoins crashed by more than 30 percent. Altogether, 98 of the top 100 cryptocurrencies declined against the dollar, and 94 fell by more than 10 percent.
When all was said and done, more than $125 billion had evaporated from the cryptocurrency market cap in a single day, an amount roughly equivalent to the combined value of all cryptocurrencies as recently as August. At the time of writing, the cryptocurrency market cap was valued at $513 billion, but that number was rapidly declining and appeared poised to slip below $500 billion.
Bitcoin headlined the retreat, as the bull market appeared to collapse with exhaustion following a breakneck December rally.
The bitcoin price plunged by more than 20 percent on Friday, confirming Pantera Capital founder Dan Morehead’s prediction that the market would see a significant retrace before the end of the year. At the time of writing, the bitcoin price was trading at $12,290, according to the CCN.com Bitcoin Price Index, placing it more than $7,000 below the all-time high it set earlier this week and reducing its market cap to a global average of $210 billion.
While the decline cannot be described as anything other than severe, it’s important to keep it in perspective. Even after this retrace, bitcoin is trading at roughly the same point as it was during the first week of December and is up more than 1,100 percent for the year.
However, this fact may not be of much comfort to recent investors, many of whom have yet to experience a true bear market and have grown accustomed to seeing all-time highs on a daily basis.
As precipitous as bitcoin’s decline was, it paled in comparison to that experienced by the majority of top-tier altcoins. In the past day, the altcoin market cap has dropped by $80 billion, from $362 billion on Thursday to $282 billion today.
No coin resisted the slaughter. The ethereum price slid by 28 percent, while bitcoin cash crashed by 38 percent to erase its recent bull run.
Ripple managed to tread water far longer than other altcoins, but even it eventually succumbed to the storm, posting a single-day decline of 22 percent that forced its price down to $0.81. That said, ripple fared better than litecoin, EOS, dash, NEM, and monero, each of which dropped by more than 30 percent for the day.
No coin in the top 10, however, was hit harder than IOTA, whose price plummeted by 42 percent, bringing it to a present value of $2.91 and reducing its market cap to $8.1 billion.
Featured image from Shutterstock.
Last modified: March 4, 2021 5:02 PM