Solana, Cardano Tokens Slide Over 9% as Cryptos See Weakness Amid Poor US Consumer Data

Bitcoin lost support at $30,000 as Chinese tech stocks sold off on earnings worries a day after hawkish comments from the U.S. Federal Reserve.

AccessTimeIconMay 19, 2022 at 7:47 a.m. UTC
Updated May 11, 2023 at 4:42 p.m. UTC

Waning sentiment around strong economic growth caused a second day of sell-offs in broader markets on Thursday morning. Asian markets slid following a day of red in U.S. equities, leading to sell-offs in bitcoin (BTC) and other major cryptocurrencies.

Bitcoin failed to regain support at $30,000 after falling below that level on Wednesday. The asset is hovering at over $29,000, with support at $27,000 should it lose current levels.

Weakness in bitcoin spread to other major cryptos, with Solana’s SOL and Cardano’s ADA losing as much as 9% in the past 24 hours to lead losses. Traders are likely selling risky assets like cryptocurrencies in anticipation of a further drop in global markets.

Price movements in cryptocurrencies have lately tracked those in the U.S. stock markets, with bitcoin trading similarly to a risky technology stock.

Ether (ETH) declined by 4%, Polkadot’s DOT fell 7%, and dogecoin (DOGE) dropped 5%. Tron (TRX) gained a nominal 0.2%, while Polygon (MATIC) erased Wednesday’s gains with a 9% slump.

Crypto market capitalization decreased by 3% to under $1.3 trillion. The slide tracked a slump in U.S. markets on Wednesday, which came as Target (TGT) reported quarterly earnings that missed estimates, sending the giant retailer's shares plunging by more than 22%.

Inflation is forcing consumers to spend more on food and less on discretionary items, as reported, with Walmart (WMT) cutting its profit forecasts on Wednesday, citing higher fuel and worker costs.

Weak earnings in the U.S. carried over to the Asian session led by weakness in Chinese technology stocks. India’s Sensex and the Asia Dow lost over 2.2%, while futures on European indexes opened nearly 0.1% lower.

Chinese tech giant Tencent posted its lowest revenue gains since 2014, and its share fell 8% on Thursday. Hong Kong’s Hang Seng Tech Index dropped 5.1% as analysts feared the ill effects of lockdowns and reduced spending could finally show up in earnings reports in Asia.

The weakness in global markets comes amid fears of lower spending in the coming years as Western countries ramp up interest rates and tighten their monetary policies.

U.S. Federal Reserve Chairman Jerome Powell has pledged to keep tightening monetary conditions until inflation comes down, with some crypto analysts expecting a further correction in cryptocurrencies should current market conditions continue.


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Shaurya Malwa

Shaurya is the Deputy Managing Editor for the Data & Tokens team, focusing on decentralized finance, markets, on-chain data, and governance across all major and minor blockchains.