Crypto Market Cap Falls Below $2T Amid Sell-Off

As bitcoin and ether breach $40,000 and $3,000 support levels, some altcoins are trading 60%-80% down from cycle highs.

AccessTimeIconJan 21, 2022 at 7:31 p.m. UTC
Updated May 11, 2023 at 5:31 p.m. UTC

Cryptocurrencies are getting rekt.

Crypto blue-chips bitcoin (BTC) and ether (ETH) breached key $40,000 and $3,000 support levels late Thursday evening, sending the broader alternative coin (altcoin) market into free fall.

According to data from CoinGecko, the total market cap of the cryptocurrency industry fell 11% to $1.9 trillion as of Friday afternoon during U.S. trading hours, down from an all-time high of $3.1 trillion in November.

Most major cryptocurrencies suffered double-digit losses and the recent slew of corrections increasingly signal bear market territory.

With the Nasdaq composite stock index down 5% in the past week, the sell-off in cryptocurrency markets appears to be echoing the movements of tech stocks.

There appears to be little safety from the bloodshed. Recent altcoin winners including Near Protocol’s NEAR (-17.5%), Fantom’s FTM (-15.4%) and Cosmos’ ATOM (-12.0%) tokens also suffered in the Friday sell-off.

NEAR, FTM and ATOM’s relatively strong performance against BTC and ETH on a year-to-date basis has some traders speculating about an altcoin decoupling. At least for the moment, today’s market downturn is sending crypto asset correlations up.

However, ATOM remains one of the only major tokens hovering in positive territory year to date (+3.0%).

Altcoin sell-off on Jan 21 2022 (Messari)
Altcoin sell-off on Jan 21 2022 (Messari)

So long, SoLunAvax

Many of the alternative layer 1 blockchain tokens that earned top performer status in 2021 have seen their market capitalizations halved during the past few weeks.

While some have outperformed BTC and ETH (which are down 44% and 42%, respectively, from all-time highs), others are struggling to maintain their 2021 momentum.

“Ethereum-killer” Solana's SOL is down 52% from its all-time high. Terra’s LUNA and Avalanche’s AVAX tokens are down 30% and 59% from all-time highs, respectively.

Ethereum sidechain Polygon’s MATIC token is down 36% and Cardano’s ADA token is down 61% since their all-time highs in September, when the latter project announced the launch of their smart contracts.

Altcoins, which are riskier and typically trade at a higher volatility than BTC and ETH, suffered drawdowns as steep as 90-99% during the 2017-2018 crypto cycle.

Dog coins down

According to data from Messari, the biggest category of altcoin losers are meme coins. Dogecoin (DOGE) is now nearly 80% down from its all-time high last May, despite a recent tweet from Tesla CEO Elon Musk that temporarily sent DOGE up as much as 33%.

Shiba inu (SHIB), another dog-themed coin that gained 1,607% last year, is down 71% from its all-time high.


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Tracy Wang

Tracy was the deputy managing editor at CoinDesk. She owns BTC, ETH, MINA, ENS and some NFTs.