The crypto market remains under intense pressure as investor sentiment sours amid prolonged selling across major altcoins. Following a major security breach last week, Ethereum, Solana, Dogecoin, and other prominent digital assets continue to slide, while Bitcoin shows relative resilience despite dropping below $91,000.
As of Tuesday morning in Asia, Bitcoin dipped more than 2.56%, trading around $91,883 — its lowest level since mid-January. The broader market downturn has now persisted for over eight weeks, with altcoins bearing the brunt of the sell-off.
Ethereum and Top Altcoins Face Sustained Pressure
Ethereum, the second-largest cryptocurrency by market cap, has seen its price plummet over the past two days with a cumulative decline exceeding 10%. On Tuesday, ETH dropped another 6.30%, reflecting growing investor caution. Solana followed a similar trajectory, falling 8.02% on the day and nearly 15% over two days. Dogecoin also declined sharply, down 6.25% on Tuesday and about 13% over the same period.
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This broad-based retreat underscores a loss of confidence in non-Bitcoin digital assets. Analysts point to weakening fundamentals, lackluster adoption, and ongoing token unlocks as key drivers behind the downward momentum.
Market Sentiment Drags on Crypto Performance
Jeff Dorman, Chief Investment Officer at Arca, emphasized that the current slump is rooted in sentiment rather than macroeconomic fundamentals.
“Crypto markets have been weak for eight straight weeks. Equities, fixed income, and gold aren’t reacting to the same data points that are supposedly pressuring crypto — yet only crypto keeps falling. The real culprits are poor sentiment, meme coin blowups, and a lack of capital flowing into new token offerings.”
Arca’s data reveals that since mid-December, most tokens have lost between 30% and 80% of their value — a stark contrast to Bitcoin’s relatively stable performance.
Solana’s market capitalization has shed approximately $50 billion over the past month alone. One contributing factor was the controversy involving Argentine President Javier Milei and a meme coin named “Libra,” which crashed to near zero. While unconfirmed, speculation linking Milei to the project damaged credibility in the ecosystem.
Additionally, on March 1, an estimated $1.72 billion worth of Solana (SOL) tokens will be unlocked — meaning they become eligible for sale. This event typically increases selling pressure as early investors and team members gain access to previously locked holdings.
Token Unlocks Fuel Selling Pressure
Edward Chen, co-founder of Parataxis, explained why this environment favors Bitcoin over altcoins:
“As tokens continue to unlock and flood the market, investors are rushing to sell. Most participants in this space are already fully allocated to altcoins. Any new capital entering crypto is going directly into Bitcoin — which explains its relative strength and rising dominance.”
This capital rotation toward Bitcoin highlights a broader trend: during uncertain periods, investors seek refuge in the most established and liquid digital asset.
Despite efforts by exchanges like Bybit to restore confidence — including replenishing $1.4 billion stolen in a recent hack — Ethereum continues to struggle. While Bybit’s CEO Ben Zhou indicated the exchange had borrowed and possibly purchased additional ETH, these moves have done little to stabilize prices.
Bitcoin Shows Relative Strength Amid Crisis
While most of the market sinks, Bitcoin is demonstrating resilience. MicroStrategy (MSTR.US), a major corporate holder of Bitcoin, announced it had acquired nearly $2 billion worth of BTC over the previous seven days. This aggressive accumulation signals strong institutional belief in Bitcoin’s long-term value proposition.
This divergence further cements Bitcoin’s role as a digital store of value — especially when compared to altcoins that rely heavily on speculative narratives and ecosystem development.
Crypto-Linked Stocks Slide With the Market
The downturn isn’t limited to digital assets. Publicly traded companies tied to cryptocurrency are also suffering.
- Coinbase Global (COIN.US) closed lower for the sixth consecutive day.
- MicroStrategy (MSTR.US) dropped about 5.7%, erasing year-to-date gains.
- Marathon Digital Holdings (MARA.US), a Bitcoin mining firm, fell another 5.3% after dropping 13% the prior week.
These declines reflect investor concerns about revenue exposure to volatile crypto prices and broader macro risks affecting tech and growth stocks.
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Frequently Asked Questions (FAQ)
Q: Why are altcoins dropping more than Bitcoin?
A: Altcoins are generally more speculative and less liquid than Bitcoin. During risk-off periods, investors often sell altcoins first while holding or even buying Bitcoin, which is seen as a safer bet within the crypto space.
Q: What causes token unlocks to impact prices?
A: When large amounts of tokens are unlocked after vesting periods, they increase supply in the market. If demand doesn't keep pace, prices tend to fall due to increased selling pressure from early stakeholders.
Q: Is the current crypto downturn temporary or part of a longer bear market?
A: With declining prices for over eight weeks and weakening investor sentiment, many analysts view this as an extended bear phase. A reversal may require stronger catalysts such as regulatory clarity, ETF approvals for altcoins, or macroeconomic stabilization.
Q: How do hacks affect overall market sentiment?
A: Major security breaches — like the $1.4 billion Bybit incident — shake trust in centralized platforms. Even if funds are recovered, the initial panic often triggers widespread selling across both native tokens and related equities.
Q: Can Ethereum recover without positive catalysts?
A: Unlikely. Ethereum needs clear upgrades, increased on-chain activity, or institutional adoption to regain momentum. Without such drivers, it will likely remain under pressure relative to Bitcoin.
Q: Why does MicroStrategy keep buying Bitcoin during downturns?
A: The company views Bitcoin as a long-term treasury reserve asset. Their strategy hinges on dollar-cost averaging and confidence in BTC’s scarcity and global adoption potential.
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Conclusion
The current crypto market environment remains challenging for altcoins. With Ethereum and Solana facing structural headwinds — from token unlocks to eroding sentiment — capital continues flowing into Bitcoin as a haven asset.
Until new catalysts emerge — such as improved regulation, stronger use cases, or macroeconomic easing — the path forward for most altcoins appears uncertain. Investors should focus on risk management, diversification, and monitoring key on-chain metrics to navigate this prolonged downturn effectively.