As investors shift focus to other markets, major cryptocurrencies like Ethereum and Solana continue to face downward pressure. The crypto sector remains subdued following one of the largest hacking incidents in its history last week. Ethereum, the second-largest cryptocurrency by market capitalization after Bitcoin, has dropped over 10% in the past two days, with further declines in Asian trading sessions.
Solana has seen a decline of approximately 15% over the same period, while Dogecoin has fallen around 13%. According to Jeff Dorman, Chief Investment Officer at Arca, the sentiment in the cryptocurrency market has been weak for eight weeks. In contrast, stocks, fixed income, and gold have all recovered from previous sluggishness, leaving cryptocurrencies as the outliers. This situation is attributed to low market sentiment, the failure of various meme coins, and a lack of funding to support new token issuances.
Since mid-December, most tokens have seen a value decline of 30% to 80%, with few exceptions, according to digital asset management firm Arca. Over the past month, Solana's market capitalization has decreased by about $50 billion, partly due to a scandal involving Argentine President Javier Milei and the significant drop of a meme coin named Libra. Research firm Messari reports that Solana is also facing pressure as approximately $1.72 billion worth of its tokens are set to be "unlocked" on March 1, lifting trading restrictions.
