As the cryptocurrency market is trying to move ahead with the recovery phase, Bitcoin and other major cryptocurrencies seem to be following the recovery trend.
However, the cryptocurrency market saw a correction following a decline in US tech stocks and the S&P 500 in recent days.
Over the last two months, the relation between Bitcoin and Ethereum and stocks and indices has remained high, compressing the cryptocurrency prices.
Bitcoin’s price fell below the psychologically important $30,000 mark, and altcoins have followed suit. Ethereum, BNB, XRP, Solana, Cardano, AVAX, Dogecoin, and Polkadot were also among the other cryptocurrencies whose prices plummeted.
Altcoins To See 90% Downfall
The crypto market is being hammered by the negative impact from the US Federal Reserve’s monetary policy tightening and falling stock prices, according to Sam Kopelman, UK manager of Bitcoin and cryptocurrency exchange Luno.
Koleman claimed that the market is still fearful, the reason being Terra’s stablecoin UST’s depegging.
According to a recent study by cryptocurrency trading site Bybit, the total value locked on Ethereum, Solana, Cardano, and Avalanche in the DeFi ecosystem has plummeted. Since the beginning of May 2022, the entire value locked in DeFi has decreased by 43%, with $84.67 billion being wiped off.
Fear and instability in the crypto ecosystem have led to a steady outflow of cash which was formerly invested in altcoins such as Solana, XRP, Cardano, Dogecoin, Ethereum, and Avalanche.
Also according to the experts, when looking at the total value locked, number of active users and trade volume, altcoins have declined much faster when in comparison with Bitcoin.
Though Ethereum-killer competitors such as Solana have portrayed themselves as extremely efficient cryptocurrency, their price action is hampered by increased ancient designs and mismatched incentives.
Meanwhile many analysts are of the opinion that Bitcoin price might bottom at $20,000 and altcoins are set to follow the flagship currency and plunge by 90% amidst the bear market.