Crypto Market Crash: Memecoins and Ethereum Lead in Losses During Market Sell-Off
Crypto Market Crash – In the wake of the most significant cryptocurrency sell-off in over a year, more than half of the 50 largest cryptocurrencies by market capitalization have fallen into negative territory. This massive sell-off has led to a staggering $510 billion drop in the total crypto market capitalization.
60% of Top 50 Cryptocurrencies Erase 2024 Gains
According to an August 6 post by CryptoQuant author Binhdangg on X, over 60% of the top 50 cryptocurrencies have lost all the gains made during 2024. Binhdangg noted, “After Black Monday, 60% of coins in the top 50 have removed all profit since the beginning of 2024 and even incurred losses.”
Ether Hits Five-Month Low Amid Market Turmoil
Following the sell-off, Ethereum (ETH) briefly dipped to a five-month low below $2,200. This critical psychological level could trigger further panic selling and downward pressure on the entire market if it continues to hold.
Causes of the Crypto Market Sell-Off
The recent crypto market turmoil was driven by a mix of macroeconomic and industry-specific factors. On August 5, the Bank of Japan raised its interest rate from 0% to 0.25%. This decision had a ripple effect on global markets, impacting both the U.S. stock market and Bitcoin prices, as traders had previously borrowed Japanese yen at low interest rates to invest in U.S. assets.
Additionally, since August 3, five major market makers have sold a combined total of 130,000 Ether, worth approximately $290 million at current prices. This selling spree has significantly contributed to Ethereum’s price drop from $3,000 to below $2,200. Key market makers involved include Wintermute, which offloaded over 47,000 ETH, Jump Trading with over 36,000 ETH, and Flow Traders with 3,620 ETH.
Memecoins Suffer Significant Losses
Among the top 50 cryptocurrencies, several popular memecoins have experienced the largest losses. On the weekly chart, Solana-based memecoin Dogwifhat (WIF) recorded the most substantial decline, falling over 41% in the past week to trade at $1.38 as of 8:37 am UTC on August 6, according to Cointelegraph data. Another memecoin, Pepe (PEPE), saw the second-largest weekly loss, dropping over 34% to $0.057781, which is more than 53% below its all-time high recorded at the end of May.
Memecoins are particularly vulnerable during market corrections due to their lack of intrinsic value. Their prices are often driven by social media hype and retail investor attention, making them among the hardest hit during significant market downturns.
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