For crypto investors, the past few weeks have been a rollercoaster, with many assets seeing price drops and failing to post significant gains. The short-term outlook is bleak, despite some analysts’ continued optimism about the market’s long-term prospects.
Halve the hype disappears
Even the grandfather of cryptocurrencies, Bitcoin (BTC), was not immune to the market slowdown. Currently trading around $63,400, BTC is down 5% over the past day and a staggering 13% from its all-time high of over $73,000.
This sluggish performance follows the recent Bitcoin halving event, which some enthusiasts believed would trigger a price surge. However, market experts predicted otherwise and it appears that their predictions were correct.
Halving, which halves the number of new Bitcoins entering circulation every four years, is intended to control inflation and theoretically increase scarcity over time. However, its impact on short-term price movements appears minimal.
SUI ecosystem feels the pinch
One cryptocurrency that is taking a particularly hard beating is Sui (SUI), the native token of the Sui blockchain ecosystem. SUI has been on a downward trajectory over the past week, dropping a surprising 30% from its all-time high of $2.20.
This week alone, SUI fell as low as $1.15 before experiencing a brief rise, only to fall again. The current price is around $1.18, reflecting a 10% loss in the last 24 hours.
SUI 24-hour price action. Source: Coingecko
SUI TVL falls
Adding to Sui’s problems is the significant decline in his total amount blocked. TVL refers to the total amount of cryptocurrencies locked in DeFi (Decentralized Finance) protocols within a specific blockchain ecosystem.
Source: Defillama
A high TVL indicates strong user activity and locked funds, which are seen as positive indicators for the health of the ecosystem. Unfortunately for Sui, his TVL is down 30% from his record high earlier this year, currently around $535 million, according to data from DefiLlama.
This drop in TVL suggests a decrease in user engagement and funds locked within the Sui ecosystem, reflecting broader negative sentiment.
SUIUSD trading at $1.18 on the daily chart: TradingView.com
Broader market correction or underlying issues?
The current market crash is not limited to Sui or even Bitcoin. Top altcoins like Ethereum, Solana, and Curve DAO also saw losses ranging from 4% to 6% last week. This suggests a broader market correction rather than a Sui-specific issue.
Analysts point to several factors that could contribute to the recession, including rising concerns about inflation, ongoing geopolitical tensions and a general feeling of risk aversion among investors.
What’s Next for Crypto?
While the short-term outlook for the crypto market appears uncertain, many analysts remain optimistic about the technology’s long-term potential. The underlying innovation and potential for disruption across multiple sectors continues to attract interest.
However, navigating the current volatility will likely require a strong stomach and a long-term investment horizon for those looking to weather the storm.
Featured image of Charleston DermatologyTradingView chart
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