About six months ago, bitcoins and many other digital assets reached new heights. In fact, the value of the crypto-economy surpassed $3 trillion. The majority of cryptocurrency are now down by between 57% and over 80% against US dollars.
Although Cryptos are down from the ATHs but 2020 holders remain in the green
On November 9, 2021, or 196 days ago, the crypto economy was valued at over $3 trillion, and today it’s worth roughly 56% less at $1.31 trillion. Six months ago, bitcoin (BTC) touched an all-time high (ATH) at $69K per unit and today, it’s down more than 57% in USD value.
After reaching $4,847.57/ether six months back, the second-leading asset, Ethereum (ETH), lost 59.85%. BNB, the fourth largest crypto asset is now down 52.65%. It has tapped $689 per unit. XRP has not reached its January 7, 2018 ATH, which was tapped 4 years ago at $3.40 per token. Today, XRP is more than 87% lower against the U.S. Dollar since that time.
Cardano (ADA), which reached its ATH nine month ago at $3.10/ADA, is currently down 83.5% versus the U.S. Dollar. Solana (SOL), which reached its ATH seven month ago, is currently down 81.5% USD.
The tenth-largest crypto asset today, dogecoin (DOGE) is down 88.8% from the meme coin’s ATH a year ago. While prices are down since 2021’s high, crypto investors that purchased digital assets in 2020 have seen it their cryptocurrencies rise. The price of bitcoin (BTC), has risen by 303.28% since 2020, while ethereum is at 465.70%.
This is true for most of today’s top coins. Binance’s BNB token has jumped 173.53% in two years and cardano (ADA) is up 443.83%. For those who have purchased crypto assets since 2017, the gains are more impressive as bitcoin (BTC), is up 1,294.85%. The U.S. Dollar is down by 8,985.15% against the second-leading crypto asset, Ethereum (ETH).
The biggest gains have been seen by XRP owners since 2017, when XRP’s value has risen to 31,346.47% in the past four years. BTC was at its highest price ever in 2017 at $20K per unit. 2021 also saw bullish values.
Crypto’s Strong Correlation With Stocks, 289-Day Bear Runs, and Further Capitulation
According to market strategists, most bear markets last less than 9.5 months. Moreover, in recent times cryptocurrencies have been correlated with equities markets and more specifically stock indexes like Nasdaq 100 and the S&P 500. This could mean that the crypto bear market won’t end until the stock market bear run is finished.
Bank of America strategists recently detailed that the S&P 500 has recorded a total of 19 bear market cycles. The average duration for each cycle was roughly 289 days and the S&P 500’s average bottom was 37.3% lower than the ATH.
The bearish sentiment may continue for three more months if cryptocurrencies follow this pattern. However, history has shown that digital assets will not be able to keep up with the current relationship to equities. Unfortunately for crypto investors, S&P 500’s average drop of 37.3% is nothing like the lows the crypto economy has seen during extreme capitulation. Trois bitcoin (BTC), bottoms were more than 80% below the peak during the bull market.
The top ten cryptocurrency assets are currently down by 57%-80%, but prices may drop further. An 80% drawdown from BTC’s $69K high would be $13,800 per unit and an 80% cut in ether’s ATH value would result in a price of $970.
Currently crypto assets, such as BTC and ETH, are at a point where the value will change in one of three ways. The price of bitcoin may stabilize in the region, but it could rise back to a bullish scenario or drop even further, resulting in greater capitulation.
Are crypto assets trading at 57% to 80% less than the highs they were? Comment below and let us know how you feel about the subject.
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