Solana, Cardano Suffer Major Losses as Crypto Market Opens Week in Red

• Crypto Market Trends and Analysis
• Bitcoin Market Pressures
• Meme Coins See Uptick
• Bankruptcy Filing by Terraform Labs
• Bitcoin and Ether Futures vs. Spot Prices

Crypto Market Trends and Analysis

The beginning of the week witnessed a downturn in the cryptocurrency market, with significant decreases in Solana$104 5.03%'s SOL and Cardano's ADA. Both cryptocurrencies reported a 5% decrease in value over the last 24 hours. Bitcoin$42,260 -0.64%, the world's most prominent cryptocurrency, also experienced a drop, losing its $41,000 support level early Monday. This decrease coincided with a 2.86% slump in the top 20 most traded tokens within the same timeframe. Experts predict that these prices may drop to about $38,000 over the next few weeks, possibly instigating further decreases in other cryptocurrencies.

Bitcoin Market Pressures

Some financial analysts attribute the recent downward pressure on bitcoin to sales from Grayscale's GBTC bitcoin exchange-traded fund (ETF). Despite this, newly approved bitcoin ETFs, including BlackRock's IBIT and Fidelity's FBTC ETFs, have reported net inflows. These inflows, totaling over $1 billion last week according to data from CoinGlass, suggest an upward buying pressure.

Meme Coins See Uptick

In contrast, meme coins such as Dogecoin$0.091 -0.42% (DOGE) and Floki (FLOKI$0.000035 -3.29%) experienced a brief increase of up to 12% before dropping again. This fluctuation came after an @xpayments profile on X (formerly Twitter), raised adoption hopes within the cryptocurrency community. The community hypothesizes that these coins could be used for advertising and other purposes on the social media platform. As a result, trading volumes for both tokens increased by 200% over the weekend, as per CoinGecko data. Notwithstanding, both coins saw a more than 5% daily decrease when a broader market downturn took effect during European morning hours.

Bankruptcy Filing by Terraform Labs

Terraform Labs, the developer of the unsuccessful stablecoin TerraUSD, has filed for bankruptcy following the coin's collapse in May 2022. According to the documents filed in Delaware on January 21, the firm's assets and liabilities range from $100 million to $500 million. This bankruptcy filing will allow the firm to continue executing its business plan amidst ongoing legal proceedings.

Bitcoin and Ether Futures vs. Spot Prices

The graph provided illustrates the basis between bitcoin and ether CME futures and the spot prices of the said cryptocurrencies. The premium in bitcoin futures has decreased to less than 0.5%, a substantial decrease from over 4% seen earlier in the year. This decrease occurred before the debut of 11 spot ETFs in the U.S. on January 11. Ether futures appear to be following a similar trend. This could be a result of traders selling futures while simultaneously buying cryptocurrencies earlier this month to pocket the elevated premium.

Edited by Jonathan Stoker