The collapse of the crypto market brought Bitcoin to $ 20,000. The pioneering cryptocurrency in turn collapsed the market with itself, causing huge losses. Not all digital assets on the market have been left out of the attack. Regardless of their market capitalization, all cryptocurrencies recorded huge losses that turned into double-digit losses in all indices.
It does not respect market capitalization
All indices have been hit hard by the collapse of the crypto market. Even the bitcoin index that led the biggest fight succumbed to it. The collapse of the entire market led to a drop in total market capitalization below $ 1 trillion for the first time in less than a year. Almost all cryptocurrencies follow the same declining trend, the one created by the market leader, Bitcoin.
However, bitcoin continued to fight well. This led to the return of digital assets as the best performance, with a loss of -29% so far in June. But this ‘safe haven’ to which investors have run for cover barely holds above the losses posted by other indices.
True, the Large Cap Index mostly tracked the performance of Bitcoin. In bear markets, they had better results compared to their smaller counterparts and this is worth it as the Large Cap Index experienced a loss of -32%.
The Mid Cap Index followed the Large Cap Index very closely, with losses matching -32%. Once again, the Small Cap Index leads in terms of losses with -33% of losses so far in the first half of the month.
Indexes suffer massive losses | Source: Arcane Research
Fights in the crypto market
The struggles of the crypto market have not just begun. It started at the end of 2021, when the momentum of bullfighting rallies finally reached its peak. However, there were other events that caused a larger decline in the market.
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The collapse of Terre started the bear running in full bloom. This was further fueled by rumors of Celsius ’insolvency after the lending platform froze withdrawals. Since the crash on December 4, more than $ 2 trillion has been wiped off the crypto market capitalization.
BTC trending at $21,000 | Source: BTCUSD on TradingView.com
All the losses suffered by digital assets, whose correlation with bitcoin continues to grow, are reportedly being eaten up by stable coins as their market capitalization grows. Their market share has since increased by more than 5% since the crash began.
Investor sentiment is now at its lowest level in three years. With Index of fear and greed reading in extreme fear with a score of 7, suggests that investors are reluctant to invest in the market.
Featured image from Euronews, charts from Arcane Research and TradingView.com
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