There is some correction in the cryptocurrency market right now, but the performance is on the upside. Contrary to the way sell-offs typically occur, bitcoin’s dominance fell dramatically as the asset underperformed the small-cap index.
From last November’s $3 trillion market cap, the crypto market has now dropped to nearly $800 billion:
Small Altcoins Make a Strong Comeback
Last week the crypto market saw its lowest level, after that now some Modest recovery. According to the latest weekly report from Arcane Research, even smaller altcoins are showing red numbers, with the small cap index dropping 27%, but it has been Overall best performer.
In contrast, bitcoin was down 35%. Through this small window of relief during June, we have seen the blue-chip coin underperform all other indices.
As a result, BTC dominance in the market fell by -1,51% to 43.5% this week, while Ether fell by -0.31. The latter has been falling from 19.5% to 15% since May.
What’s Making This Crypto Winter Cold
The report states that the primary driver of this crypto crash is the collapse of hedge fund Three Arrows Capital (3AC). After the Luna Foundation invested more than $200 million in Guard’s token sale, 3AC ran out of liquidity and its margin call was the last straw for an already stressed market.
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According to the Wall Street Journal, the crypto hedge fund has hired legal and financial advisors to help it work out solutions for its investors and lenders. The firm is looking for a way out, “including the sale of the asset and the hedge by another firm”. Given the wave of liquidations by crypto exchanges following the collapse and the lack of losses, the forecast is not very positive at the moment.
“We weren’t the first to be hit… it’s all part of the same transition that has affected many other firms,” 3AC co-founder Kyle Davis said in an interview.
Arcane Research explained that “in the period of bankruptcy, creditors are the first to open up the most liquid assets, which may be the root cause of the relative poor performance of BTC and ETH over the past week.”
The report states that “essential altcoins are more challenging to sell in size, especially in times of pressure, which explains why smaller coins have experienced less extreme selling pressure over the past week”.
Meanwhile, MicroStrategy CEO Michael Sayer described the events around this winter as a “parade of horrors”, with the consequences of a lack of regulation in the crypto sector leading to wash trading and cross-collateralization weighing in on bitcoin. made possible for altcoins.
“You have a $400 billion cloud of opaque, unregistered securities trading without full and fair disclosure, and they are all cross-collateralized with bitcoin.”
“The general public should not buy unregistered securities from wildcat bankers which may or may not happen next Thursday,” Sailor said, slamming the recent collapse and suggesting that future action by regulators is on the volatility of BTC. level can be stopped. is experiencing.
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