Solana, Avalanche Dip amid BTC's Strive for $38K Support

• Cryptocurrency Downturn as Institutional Sales Impact Major Tokens
• A Reversal of Fortunes
• Dogecoin Retraces Steps
• Decline in Broader Crypto Market
• Impact on Bitcoin Short-term Holders
• Exiting at a Loss
• Expectations of Further Price Correction

Cryptocurrency Downturn as Institutional Sales Impact Major Tokens

Notable tokens experienced a slump this Tuesday as institutional sales connected to newly launched exchange-traded funds (ETFs) pulled down Bitcoin$42,260 -0.64% (BTC) prices. This led to an over 20% decline for certain tokens over the past week. Among those affected were Solana$104 5.03%'s SOL, which tumbled by 7%, and Avalanche's AVAX, which dropped by 9% within the last 24 hours.

A Reversal of Fortunes

This downturn effectively reverses the gains sparked by a meme coin-powered rejuvenation for both the Solana and Avalanche ecosystems in December. At that time, the prices of their respective tokens hit a yearly high. More significantly, some of the most popular tokens of these two networks suffered significant decreases. Solana's top meme token, BONK, dropped by 10%, and JOE$0.634 3.84%, the token of Avalanche-based decentralized exchange Trader Joe, fell by 12%.

Dogecoin Retraces Steps

In another development, Dogecoin$0.091 -0.42% (DOGE) traded at 6 cents, completely reversing its entire weekend surge to 9 cents. This was fueled by speculation surrounding its inclusion in an imminent payment service on a social application.

Decline in Broader Crypto Market

The Source 20, a liquid index tracking the largest tokens by capitalization, fell by 4%, which is indicative of the average decreases in the broader crypto market. Few tokens remained in the green, including FTX$3.28 -5.38%'s FTT, which saw a boost due to revival hopes, and Uma Network's UMA, which was purchased by market influencers on a certain platform in the past week, anticipating a forthcoming product launch.

Impact on Bitcoin Short-term Holders

Analysts at the crypto exchange Bitfinex reported on Tuesday that the recent slump in Bitcoin prices had negated gains for short-term investors. This led to increasing levels of realized losses, contributing to a market drop.

Exiting at a Loss

Over half of the profits accumulated by short-term holders have been wiped out under $43,000. Many holders, particularly those who acquired BTC less than a month ago, are now exiting the market at a loss, the analysts said. Such a significant drop in average profits for short-term holders, who are often more sensitive to short-term market fluctuations, could be a harbinger of selling pressure or exit liquidity.

Expectations of Further Price Correction

Bitfinex further commented that A significant price correction even further down from current levels across the market would not be surprising. This mirrors the sentiment from a growing number of traders who anticipate Bitcoin to fall as low as $38,000 in the upcoming weeks.

Edited by Jonathan Stoker