Market Wrap: Traders Brace for Higher Volatility; Altcoins Underperform

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Most cryptocurrencies traded lower on Monday, although selling pressure slowed compared to last week. Bitcoin is down about 2% in the past 24 hours, compared to a 3% drop in ether and a 6% drop in the Solana token SOL.

The poor performance of altcoins on Monday indicates that traders remain cautious. Altcoins tend to fall more than bitcoin during downturns in the market due to the higher level of risk involved.

The recent price drops have led to losses for some leveraged traders. For example, more than 109,000 traders experienced liquidations in the past 24 hours as bitcoin fell below $40,000 on Monday for the first time since September.

Cryptocurrency exchange QCP Capital wrote in a Telegram announcement on Monday: “Volatile markets do not appear to reflect ‘extreme fear’.” Indeed, over Friday and the weekend, our volatility desk saw a lot of call buying interest especially in both BTC and ETH”.

Latest Prices

  • Bitcoin (BTC): $41.714, -1.77%
  • Ether (ETH): $3,082, -3.60%
  • S&P 500: $4,670, -0.14%
  • Gold: $1800, +0.18%
  • The 10-year Treasury yield closed at 1.77%.

Record crypto fund outflows

With cryptocurrency prices dropping, fund investors remain in a downtrend. Record weekly outflows from digital asset investment products totaled $207 million in the seven days to January 7.

CoinDesk’s Lyllah Ledesma reports that a wave of redemptions is adding to pressure on the market that began in mid-December, bringing the four-week total outflow to $465 million.

Bitcoin-focused mutual funds saw $107 million in outflows, while ether-focused funds saw $39 million in outflows last week, bringing the last four weeks of outflows to $180 million.

Weekly Crypto Fund Streams (CoinShares)

Tour around Altcoin

  • Avalanche, limited price polygon retracement: Avalanche (AVAX) and Polygon (MATIC) initially rose around 4% during the Asian trading session, but ended up lower over the past 24 hours. Overall, most cryptocurrencies underperformed Bitcoin on Monday, indicating a lower risk appetite among cryptocurrency traders.
  • Binance.US office in Solana Metaverse: Cryptocurrency exchange Binance.US is building a space in Portals, a metaverse platform built on the Solana blockchain. Companies have been rushing into open metaverses like Sandbox and Decentraland, both of which are based on Ethereum. Gates appear to be a favorite early on to capture the metaverse mania on the high-speed Solana blockchain, according to CoinDesk’s Shuria Malwa. Read more here.
  • The tree-planting phase of the Cardona blockchain: Cardano CEO Frederic Griegard tweeted on Sunday that he had reached the goal of planting one million trees. Cardano’s partner, Veretri, plants a tree every time the Cardano ADA coin is exchanged for the TREE token. TREE, in turn, can be exchanged for digital trees and non-fungible tokens (NFTs) within certain “redemption days”. This activity is part of a broader effort by Cardano to become a climate-positive blockchain, according to CoinDesk’s Shaurya Malwa. Read more here.

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other markets

Most of the digital assets on CoinDesk finished 20 lower today.

Biggest winners:

Biggest loser:

Sector rankings are provided via Digital Asset Classification Standard (DACS)Developed by CoinDesk Indices to provide a reliable, comprehensive and standardized rating system for digital assets. the Queen desk 20 It is a ranking of the largest digital assets by volume on trusted exchanges.

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