The crypto market was having another wild day as a combination of factors – the LIBRA rug-pull scandal, rising Bitcoin dominance, and macro uncertainty – is bearish. In 3 days, the total market cap has gone from $3.3 trillion to $3.16 trillion, that’s $150 billion wiped out. What are the drivers of today’s sell-off, the stats for Bitcoin, Ethereum, Solana, and XRP, and what are top analysts saying?
LIBRA Scandal: A catalyst for pessimism
Our previous LIBRA scandal report that started over the weekend has added to the negative sentiment. allegedly, Argentinian President Javier Milei endorsed a cryptocurrency called LIBRA, which was supposed to be for raising funds for small businesses and startups in Argentina, but insiders dumped the token, and the price collapsed to almost zero. Milei then reportedly deleted the post and now investors are wondering if he was misled by the project insiders.
Adding to the already available information, Cardano founder Charles Hoskinson, in a video streamed on Sunday, said Milei was misinformed by his advisors and compared the scandal to other meme coins. This scandal has caused political turmoil in Argentina, with the opposition allegedly calling for impeachment and a federal judge to investigate, and has also further dampened the sentiment around altcoins and meme coins. As noted by the crypto options trading desk at QCP Capital
“BTC dominance has reached ~60%, 4 year highs as #ETH and other altcoins continue to underperform.”
This shows how the LIBRA scandal is adding to the pessimism and directing the focus to safer assets like Bitcoin.
Market Cap Erosion and Altcoin Underperformance
In the last 3 days the total market cap has gone down by $150 billion from $3.3 trillion to $3.16 trillion. Among the affected assets, altcoins are getting hit the most:
– Solana (SOL): Down 15%, just a little above $170 at the time of writing.
– XRP: Down 8%, still above $2.5.- Ethereum (ETH): Down 2%.
– Bitcoin (BTC): Down less than 3%.
The difference between Bitcoin/Ethereum and altcoins like Solana and XRP shows a flight to quality in the market. As BTC dominance goes above 60% (4 year highs) investors are favouring Bitcoin over smaller cap, riskier assets.
Macro Uncertainty
In addition to crypto specific factors, broader macro concerns are also weighing on investor sentiment. The recent hawkish tone from the Federal Reserve, as reiterated by Fed Governor Patrick Harker has added to the caution. Harker said we need to keep interest rates steady until inflation moderates, effectively capping Bitcoin’s upside since January. This cautious monetary policy has added to the bearish pressure in the market and prevented any significant upmoves.
Macro concerns plus crypto specific scandals have kept Bitcoin below 100K for 2 weeks. Although the price drop has been only 3%, the dominance has surged – investors are hedging by moving into what they perceive as safer assets in the crypto space.
Expert Insights: Mixed Signals and Future Projections
The market is sending mixed signals. On the one hand, Jamie Coutts from Realvision warns that another market “flush” is imminent. He said
“Now some solid protocols are down 50-80%. Two weeks ago we had a decent flush and high liquidation day. Sentiment is horrible. Probably going to see one more decent flush.”
This means another short-term dip is possible before any up move.
On the other hand, Bernstein analysts led by Gautam Chhugani are more bullish in the medium term on Bitcoin. They said
“The next leg of the Bitcoin bull market is loading up with a confluence of several positive catalysts… We believe the Crypto Task Force, led by David Sacks, is focused on delivering the National Bitcoin Reserve, upon the direction of the President.”
The Bernstein team thinks the US Sovereign Wealth Fund will add Bitcoin and other crypto assets as reserve holdings soon – which will bring back confidence and long term growth.
This divergence in expert opinion shows the complexity of the market where short term bearish signals coexist with long term catalysts.
Market Movements
| Asset | Price Movement | Key Statistic |
| Market Cap | -$150B in 3 days | From $3.3T to $3.15T |
| Solana (SOL) | Down 15% | Below $170 |
| XRP | Down 8% | Still above $2.5 |
| Ethereum (ETH) | Down 2% | Relatively stable |
| Bitcoin (BTC) | Down <3% | BTC dominance now above 60% |
Conclusion
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Crypto markets are under stress as the LIBRA rug-pull, rising BTC dominance and macro uncertainty collide to create a bearish environment. $150B wiped out in 3 days is crazy. Altcoins like Solana and XRP are getting smashed while Bitcoin and Ethereum are holding up relatively well – a sign of a flight to quality.
Experts are divided, with some saying more short-term pain and others saying a medium-term recovery for Bitcoin with institutional moves and new reserve asset policies. As the market deals with crypto-specific scandals and broader economic headwinds, investors should be cautious and focus on assets with strong fundamentals.
The next few days will be telling if the bearish pressure persists or if the positive catalysts emerge. For now the market is super fragile so be careful and strategic.
The BIT Journal is available around the clock, providing you with updated information about the state of the crypto world. Follow us on Twitter and LinkedIn, and join our Telegram channel.
FAQ
1. What’s causing the crypto downturn?
The market is down due to LIBRA rug-pull, rising BTC dominance and hawkish monetary policy.
2. How much did the market cap drop?
$150B from $3.3T to $3.15T in 3 days. Ouch.
3. Why is Bitcoin and Ethereum less affected?
Bitcoin and Ethereum down less than 3% and 2% respectively. They’re seen as safe assets in this volatility.
4. What’s the impact on altcoins?
LIBRA scandal has bombed altcoins and meme coins. Solana down 15% and XRP down 8%.
5. What are experts saying?
Analysts are divided. Realvision’s Jamie Coutts says another flush before recovery while Bernstein analysts say medium term bull for Bitcoin if institutional catalysts emerge.
Glossary
Crypto: Short for cryptocurrency; digital assets using blockchain technology.
Market Cap: Total value of all coins in circulation.
Altcoin: Any coin other than Bitcoin, more volatile and less established.
BTC Dominance: Percentage of total market cap of Bitcoin.
LIBRA Rug-Pull: Scam or exit scam in a cryptocurrency project. Think LIBRA.
Hawkish Monetary Policy: Central banks raising interest rates to combat inflation, which can hurt risk appetite in markets.
FUD: Fear, Uncertainty, Doubt. Negative sentiment that can cause a market dump.
Disclaimer
This is not financial or investment advice. Do your own research and consult with professionals before making any investment decisions.
References
The price predictions and financial analysis presented on this website are for informational purposes only and do not constitute financial, investment, or trading advice. While we strive to provide accurate and up-to-date information, the volatile nature of cryptocurrency markets means that prices can fluctuate significantly and unpredictably.
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