Altcoins See Red as Bitcoin Capitulation Drags Down Market
Almost all the leading altcoins are shrinking in value today after Bitcoin (BTC) crashed below the $7,000 mark earlier on Friday before recovering to around $7,300 at the time of writing.
The sizeable decline in BTC sent crypto investors scrambling as altcoins followed suit, with Ethereum (ETH), Ripple (XRP), and Binance Coin (BNB) leading the way. Ethereum, the largest of the altcoins, dropped nearly 10% earlier today to below the main $165 USD support area. Bitcoin Cash nosedived below $210, while XRP is currently worth just $0.23. Interestingly, Tether actually gained slightly to just above the $1 mark.
The value of Bitcoin and the various altcoins are closely linked given BTC’s dominance of the crypto space. When it first emerged as the pioneering crypto asset a few years back, investors flocked to the scarce digital currency with many millionaires being made during that massive 2017 bull run. As a result, altcoins such as Ethereum rocketed in popularity as traders sought out alternative ways to flip a profit on the emerging crypto buzz.
Now, almost two years later, the crypto market is stagnating due to a general lack of interest. Bitcoin’s early 2019 rally started to bring some interest back into the market, but since then, the volume in BTC is also drying up. The market for altcoins had appeared to be picking up pace amidst a crypto crackdown in China and a general boredom in the market. While Bitcoin has regained a portion of its value from that 2017 run, many altcoin holders are sitting on losses in excess of 90%.
The altcoin market capitalization has shrunk over the past year despite an increase in trading volumes, and this can be largely attributed to the falling price of the more prominent altcoins such as Ethereum and Ripple. At present, the combined capitalization of the 2,022 crypto assets with a known market cap is roughly $222 billion USD.
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