Monday was expected to mark a momentous milestone for the crypto community, however, it was overshadowed by a significant drop in the value of a wide range of cryptocurrencies.
Even some altcoins that had led the rises in recent weeks, such as Cardano have fallen considerably. Business Insider spoke to 5 cryptocurrency trading experts to understand what’s going to happen next in the crypto market and why some cryptocurrencies have managed to avoid the massacre.
The Main Reasons of the Massive Sell-off
From the time El Salvador announced that it would make bitcoin legal tender, bitcoin rose about 52%, to around €45,000.
At Genesis Trading, hedge fund and high net worth clients are increasingly using options to protect against these types of market moves. In particular, they saw put spreads as an attractive way to buy protection against short-term dips like this one.
Meanwhile, Seth Ginns, director of liquid investments at Coinfund, says investors have not been deterred by the drop and see it as healthy. According to him, it takes a little bit of volatility to drive the big upside returns we see in cryptocurrencies.
Why has Solana outperformed?
While most cryptocurrencies experienced significant volatility, the Solana token rose 418% and on the day El Salvador began its new financial journey it rose nearly 40%. Solana is seen as an “ethereum killer” as it is a layer one blockchain that attempts to solve some of the problems facing the ethereum blockchain, such as slow speeds and high gas rates.
Solana is bidding to be the third-largest mega-cap institutional asset, after bitcoin and ethereum. We are hearing about a large and steady institutional supply, as it is among the most attractive blockchains for applications at the intersection of traditional finance and DeFi.
Bitcoin Crash: What’s going to happen in the Crypto Market?
Some experts think that the market downturn was necessary because the industry because it will recover from this week’s decline and continue to move forward. With the re-rating of many altcoins, they expect another upward move.
The rise in Ethereum’s price through recent volatility is leading to further buyback of the token, which should drive the price higher. The scale of the fear and greed index indicates that we are in a fear stage. As a consequence, this will lead to the alternative season coming to an end with a lot of people selling out of fear.
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