Cryptocurrency market faces identity crisis after historic plunge
Over the past week, the total market capitalization of the crypto sector has dropped by a whopping 25%
- Top 5 cryptos like BTC, ETH, and BNB continue to be faced with major losses, although some altcoins are currently soaring in value.
- ADA, DOT, MATIC, SOL have showcased gains of 26%, 10%, 131%, and 13% over the previous fortnight.
- Despite Bitcoin's shrinking market dominance, experts believe that the cryptocurrency will continue to shape the industry's overall trajectory.
The past seven days have been quite volatile for the global cryptocurrency market, with a majority of the coins in the top-10 being faced massive sell-offs.
Since May 12, the total market capitalization of cryptocurrencies has continued to dip quite rapidly, dropping from AU $3.27 trillion to AU $2.58 trillion (thereby showcasing a downturn of over 25%).
However, in the midst of all this crazy negative price action, it appears as though an increasing number of altcoins are continuing to gain a lot of financial traction.
One major factor that may be causing altcoins to rally, is that Ethereum's average transaction prices continue to remain a problem, causing many DeFi users to look for alternatives.
Providing his views on the existing situation as well as what lies ahead for the industry, Petr Kozyakov, co-founder and CEO at the global payment network Mercuryo, told Finder that as the market strives to find its footing amidst all the craziness, there are some interesting developments to keep a note of, adding:
"While Bitcoin is notably leading the freefall, many altcoins are either showing resilience to the downtrend or charting a new bullish path for themselves. Over the past week, Cardano, MATIC, Solana, and some altcoins have shown this bullish trend against the broader market moves."
In his view, various altcoins are gaining traction quickly since an increasing number of investors are now looking inwards into multi-functional blockchain infrastructures, with use cases ranging beyond simply funds transfers. "Some altcoins qualify in this regard as they brandish innovation, useability, security, and a framework for DApps and smart contracts," he added.
The market is evolving, fast
Recent trends related to the cryptocurrency industry seem to indicate that the market is slowly but surely speeding past the point of consolidation and tilting towards an imminent bearish slowdown. In this regard, Konstantin Anissimov, Executive Director at cryptocurrency exchange CEX.IO, told Finder:
"The excuse for this continuous offloading of Bitcoin is tightly linked to Elon Musk and Tesla's announcement of scrapping their earlier embrace of BTC. That said, while Bitcoin's dominance has dropped to 40%, events surrounding the coin still shape the broader market at large."
Lastly, Anissimov is of the mindset that the industry is just going through another cyclical upheaval but business should soon return to normal fairly soon, especially as the amount of institutional money coming into this space continues to increase with each passing day.
Disclosure: The author owns a range of cryptocurrencies at the time of writing