Crypto Market Plunges $150B; Solana Drops 15% as BTC Dominance Hits Four-Year High

The cryptocurrency market continued its downward trend into the new week, with the total market capitalization dropping from $3.3 trillion to $3.15 trillion. This decline, which occurred over the weekend, resulted in a loss of $150 billion in market value.

During this period, Solana (SOL) experienced the most significant drop, shedding 15% and falling below $170 at the time of writing. XRP followed with an 8% decline but managed to stay above $2.5. In contrast, Bitcoin (BTC) decreased by less than 3%, and Ethereum (ETH) retracted by only 2%, indicating relatively stronger performance amidst the broader market weakness.

The market sentiment was further dampened by the LIBRA meme-coin 'cam', which has added to the macro uncertainty. Crypto options trading desk, QCP Capital, noted that BTC dominance has risen to around 60%, reaching four-year highs as ETH and other altcoins continue to underperform. The recent LIBRA 'rug pull' scandal involving Argentinian President Javier Milei has also contributed to the negative sentiment surrounding altcoins and memecoins.

BTC's upside has been capped since the January hawkish Fed interest rate pause, with Fed governor Patrick Harker maintaining a hawkish stance. The bearish pressure has kept the king coin below $100K for nearly two weeks, while BTC Dominance (BTC.D) has shot above 60%, further blocking the rebound of altcoins. Analysts like Realvision's Jamie Coutts projected another flush could be likely before BTC bounces, despite the boring markets.

Despite the current market conditions, Bernstein analysts, led by Gautam Chhugani, made a bullish call for BTC in the medium term. They believe that the next leg of the Bitcoin bull market is loading up with a confluence of several positive catalysts, including the potential inclusion of BTC and other crypto as reserve assets in the US Sovereign Wealth Fund (SWF).