Last week, the crypto market showed a positive sign as Bitcoin, the most valuable crypto in market capitalization, surpassed $21,000, and investors hoped that the US Federal Reserve would reduce its interest rate hike. However, that is no longer the case as Bitcoin has returned to the $19,000 support level, and Ether (ETH) has dropped to the $1,480 mark, while Solana (SOL) is suffering the most significant loss as it continues to fall. However, Polygon’s MATIC seems to be doing better than most top coins. Let us explore more about crypto market’s current conditions.
NFTs or Non-Fungible Tokens have been an integral part of the Web 3.0 ecosystem’s growth story. Solana, which is a blockchain also dubbed as ‘Ethereum-Killer’, also backs NFTs and Decentralised Finance (DeFi). The fall in Solana price is therefore associated with the tumbling number of buyers of Solana-based NFTs.
Nansen data shows that returning buyers of Solana based NFTs have seen a decline. Though the number of new buyers is now seeing a rise. Weekly transactions are also another area where the decline is easy to monitor. The transactions had hit an all-time high of 650,000 in the second week of September. As of November 7, though, the network processed roughly 160,000 NFT transactions.
The result is Solana’s native token SOL witnessed a steep fall of 16.31% over the last 24 hours, and the trading price is about $28, according to coinmarketcap.com data at the time of writing.
The drop is associated with the NFTs and the general status of the crypto market. Speculation has skyrocketed over the solvency of billionaire Sam Bankman-Fried’s FTX crypto exchange. According to CoinTelegraph, one theory is that FTX might try to scrap out its Solana holdings to raise liquidity.
Macro Factors
In a domino effect, Bitcoin and Ether have also slowed down. While there are no obvious reasons, it is being linked to macroeconomic factors like the Federal Reserve’s meeting on the 1st and 2nd of November. Before the actual meeting, many investors had expected that the Fed would pivot from its stricter policy. But Chairman Jerome Powell urged that the Fed will increase the interest rates, dampening the hopes of many. The result of the November meeting was that the Fed increased interest rates by 75 base points.
Bitcoin has plummeted below the $20,000 level again, trading currently at $19,775.77 (at the time of writing). The slip comes after a bullish takeover which shot up the prices of the coin to more than $21,000.
Ether has also shown a similar chart, dropping below the $1,500 level. Currently, the coin trades at $1,480.54, a slight recovery from its 7-day lowest of $1,453.43.
The rise in Polygon’s MATIC token remains unaffected by the market’s tumbling effect. The coin rose over the last few days as the use cases of the Polygon blockchain increased. Meta has recently partnered with Polygon to allow users to mint, showcase, and sell NFTs on Instagram. Polygon has also announced a partnership with Reddit for Reddit’s Avatars collection, which has been made available on Polygon. JPMorgan Chase also used Polygon for its first DeFi transaction.
To round up the week’s performance, here is the heatmap from coin360.com. As noticeable, most of the top coins are in the red zones. BTC has experienced a loss of about 3.15% over the last 7 days, while ETH fell by 4.95%. Litecoin and MATIC are the only top coins that have maintained a growth momentum, with MATIC rising by about 29% over the last 7 days.
Disclaimer
Please note that this is not trading advice. We recommend you to carry out your own research before making any trading decisions. This article is for informational purposes only.
