Cryptocurrencies have experienced market corrections in the early days of 2024, influenced by various factors. These include trader concerns triggered by reports, the dissemination of a fake spot Bitcoin (BTC) ETF announcement on social media, and several other contributing factors.
On-chain data reveals a decrease in asset prices during the second week of the year, particularly impacting altcoins. Many of these alternative cryptocurrencies have witnessed significant declines, with some falling by over 10% in the past seven days.
One notable example is Solana (SOL), which had a remarkable performance in December. SOL briefly overtook Binance Coin (BNB) as the fourth-largest cryptocurrency by market capitalization, thanks to its impressive surge of over 60% within a few weeks last month.
Despite the positive metrics indicating growing decentralized exchange (DEX) volumes, the asset has seen a 10.64% decline in the past week and a 3% drop in the last 24 hours. However, it’s worth noting that there are still gains from its recent bullish run, with a 34% increase over the last 30 days.
Ripple (XRP), on the other hand, continues to struggle, with an 11.59% loss in the past week and a 1% drop in the last 24 hours. Despite some positive developments in late 2023, the coin has hovered around a 10% decline over the last 30 days.
In contrast, Binance Coin (BNB) has shown a much more robust performance over the past month. It has reclaimed its fourth position in market capitalization, with a 24% gain in the last 30 days. This improvement is attributed to increased Binance spot volumes, driven by renewed institutional investment and a general market recovery.
Altcoins Cardano and Avalanche in similar waters
Cardano (ADA) and Avalanche (AVAX) experienced more substantial losses of 18.33% and 16.47%, respectively, as broader market liquidations continued. Notably, both of these assets have seen increased trading volumes as they emerged from the bearish trend triggered by industry setbacks in 2022 and macroeconomic factors.
Cardano’s growth has been fueled, in part, by a rise in institutional products and the entry of new investors. Its developmental roadmap has also drawn more users, with the community emphasizing its potential as an Ethereum (ETH) competitor, especially as ETH faces challenges on the institutional front.
Avalanche witnessed significant upward momentum in 2023, primarily driven by its real-world asset tokenization initiatives. Several traditional institutions partnered with the network for related projects, contributing to its success.
Ether holds still
Despite ongoing market liquidations, Ethereum stands out as the only altcoin within the top 20 by market capitalization that has managed to maintain gains over the past seven days.
As of the current moment, Ethereum is trading at $2,405, reflecting a 5% increase in the last 24 hours and a modest 1.2% rise in the past week. Ethereum has also shown growth in its institutional products, with approximately $30 million in inflows recorded in the first week of the year, continuing the positive trend that began in December.
The significant liquidations in the market have been attributed to a Matrixport report suggesting that Bitcoin (BTC) ETF applications will face rejection in January. Additionally, the liquidations were exacerbated by a hack of the Securities and Exchange Commission’s (SEC) Twitter account, resulting in a fake post regarding ETF approval. These events have contributed to the turmoil in the cryptocurrency market.
