Crypto Market Drops Below $2 Tln But Recovers Marginally

By RTTNews Staff Writer | Published: 1/7/2022 9:01 AM ET

It is another day of losses in crypto sphere as cryptocurrencies briefly fell below the psychological $2 trillion mark, before rising again. Aggregate market cap is currently at $2.0 trillion compared to $2.1 trillion on Thursday and $2.97 trillion in mid- November, 2021.

The Fed’s sense of urgency in withdrawing the monetary stimulus and progressing to interest rate hikes, coupled with the continuing unrest at Kazakhstan have spooked crypto markets for the second day in a row. Markets now await the non-farm payrolls data for clues on whether the Fed will waver in its aggressive monetary policy stance and defer interest rate hikes or proceed as per the announced path. The Fed has often attuned its monetary policy stance to the evolving situation in the labor market and inflationary front.

Bitcoin is currently trading at $42,318.27, down 1.85 percent overnight. 64 percent of Bitcoin holders alone are in-the-money at current prices. Despite the successive declines, BTC remains at the 10th spot among all assets as per companiesmarketcap.com. Bitcoin’s dominance remains stable at 40 percent.

Ethereum’s current price is $3,235.12, after registering an overnight decline of 4.46 percent. Ethereum has touched a 24-hour low of $3,144.97. Seventy One percent of holders are in the money at current prices. Ethereum has tumbled to the 26th position among all assets as per companiesmarketcap.com, versus 15th position on the 22nd of December, 2021. Ethereum’s dominance has also fallen sharply to 19.2 percent from 19.7 percent a day earlier.

The remaining altcoins now command 40.8 percent of the market share versus 40.3 percent a day ago.

Stablecoin dominance, or the share of stablecoins in the aggregate market capitalization, a key metric that denotes the extent of risk-taking in the market increased to 8.17 percent, from 8.11 percent a day ago. As stablecoins allow investors to keep their funds less volatile than other cryptocurrencies, the relative size of the stablecoin market can be used as a gauge of market behavior. The absolute amount of investment in stablecoins however increased marginally to $164.25 billion from $164.1 million, a day ago.

The top-most stablecoin Tether (USDT) is continuing at the 3rd rank among all cryptocurrencies.

21st ranked Cosmos (ATOM), 89th ranked Secret (SCRT), 44th ranked Harmony (ONE), 60th ranked Quant (QNT) and 30th ranked Decentraland (MANA) have made overnight gains of more than 10 percent.

7th ranked Cardano (ADA) that gained 1.19 percent and 14th ranked Polygon (MATIC), with an overnight increase of 0.73 percent are the lead gainers in the top-15 assets category. Polygon network activity has been surging of late amid record high NFT sales.

5th ranked Solana (SOL) declined the most in the category, by 5.82 percent. Solana’s slide followed reports of degraded performance for the second time in the week.

Crypto markets are anxious whether the unrest in Kazakhstan would impact crypto prices like it did in May 2021 when Chinese clampdown and environmental concerns roiled market sentiments. The Kazak situation has clearly exacerbated the panic surrounding the transition to the interest rate increase scenario envisaged by the Federal Reserve.

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Article written by an RTT News Staff Writer, and posted on the RTT News.com website.

Article reposted on Markethive by Jeffrey Sloe