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Has the cryptocurrency bull run come to an end?

Exciting news from the crypto world! Solana, a big player in memecoins and major L1 blockchain network, experienced a slight dip in its market cap on Monday along with the rest of the crypto market, which saw a 4% decrease.

Solana (SOL) saw a drop in value of approximately $3 billion, settling around $128. This marks a 10% decrease in the past week and is about 50% away from its previous all-time high (ATH) reached during the peak in 2021.

Not just Solana, but other prominent cryptocurrencies like Bitcoin (BTC), Ethereum (ETH), BNB, XRP, Toncoin (TON), and Dogecoin (DOGE) also faced declines of up to 10% in the last week as the market took a downturn. The crypto fear and greed index hit a neutral level at around 51 for the first time in over a month, indicating a general uncertainty in the market sentiment, whether it’s leaning towards bullish or bearish.

Exciting insights from the crypto fear and greed index!Β | Source: alternative.me

Unraveling the Market Trends

If we look back at previous cycles, it’s not uncommon to witness 30%-40% drops in the market, especially post Bitcoin halvings. Hence, the current downward movement in the market doesn’t come as a surprise.

Furthermore, TradingView data reveals that the total cryptocurrency market cap has surged by over 35% year-to-date (YTD), a stark comparison to the S&P500 index which has only seen a 15% increase during the same period.

Solana sheds $7b in 7 days: Is the crypto bull run over? - 2

Exciting growth in the total crypto market this year | Source: TradingView

Recent reports from crypto.news suggest that altcoin products received notable investments last week, hinting towards a trend of investors and traders being inclined to “buy the dip” in risk assets.

Another crucial aspect to consider is the economic measures initiated by the Federal Reserve. Despite the recent hawkish tone in the Federal Open Market Committee (FOMC) meetings, there’s an expectation for a rate cut in September.

Speculations are rife about the imminent approval from the Securities and Exchange Commission (SEC) for a spot Ethereum ETF, which could spark further growth. However, the debate among decentralized finance (defi) enthusiasts continues on how ETFs tracking spot prices will impact the on-chain ecosystem positively.

Adding to the mix is the evolving scenario post the Bitcoin halving, anticipated to create a supply shortage. With halved block rewards and an uptick in demand for spot Bitcoin ETFs, the market might not have enough Bitcoin to meet the increasing buying pressures, potentially driving prices upwards.


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