Despite the pronounced impact of the Bybit hacking incident—marked as one of the largest breaches in cryptocurrency history—both Bitcoin and Ethereum have shown relative stability, indicating the cryptocurrency market's maturation, according to CoinDesk on the 24th (local time). TradingView reported Bitcoin's 30-day implied volatility index from Volmex Finance dropped to 48.45%, reaching its lowest since July of last year, alongside Ethereum's implied volatility, which slightly increased over the weekend from 67% to 70% before falling again.
QCP Capital, a cryptocurrency trading firm, interpreted this stability as a sign of market maturity. They stated, "The current price movements highlight the gradual maturation of the cryptocurrency environment, particularly the crypto credit market, since the FTX collapse of 2022." They emphasized how various sectors—crypto custody, security solutions, corporate governance, and transparency—have been significantly strengthened following past crises.
Meanwhile, Benjamin Cowen, CEO and founder of ITC Crypto, noted on X (formerly Twitter) the upward trend of Bitcoin's dominance (market share), stating, "This is a positive sign, indicating the cryptocurrency world is healing." On the 24th of January at 9:43 AM Eastern Time, Bitcoin was priced at $95,277, marking a 0.58% decline from the previous day after reaching its new all-time high of $109,114 on January 20th.
Elsewhere, the cryptocurrency market faced additional headwinds as it grappled with recent downturns. Bitcoin at one point fell below $94,000, with several major altcoins also experiencing declines during early trading hours. Despite no new negative news, the overall investment sentiment remains cautious due to the aftermath of the Bybit hacking.
On Wall Street, pre-market gains for indices like the S&P 500 and Nasdaq reversed course, adding to the pressure on the digital asset market. Worries arose over funds flowing out of Bitcoin and Ethereum spot ETFs listed on US exchanges. A significant decline was noted for Solana, contributing to the weakened market atmosphere.
Concerns around Solana were tied to the upcoming large-scale token unlocking scheduled for March 1st and the negative sentiment stemming from the recent Libra token scandal, surrounding meme coin activities based on Solana.
The securities regulatory environment also shifted, with news breaking of the SEC officially concluding its investigation of Robinhood's cryptocurrency division, alongside the continuous Bitcoin buying trend by strategists, though these developments failed to reverse the market's bearish flow.
One piece of existential worry for investors is the lack of significant positive catalysts to invigorate the cryptocurrency market any time soon, with expectations of on-going subdued trends persisting. Nevertheless, the drop to the lowest Bitcoin exchange balances since 2018 presents potential upside due to supply concerns.
On January 24th, the total market capitalization of cryptocurrencies dropped by $30 billion to $3.06 trillion, falling 3.49% over the last 24 hours, as reported by CoinMarketCap. This drop compares to earlier trading before the US stock market opened.
Trading volume across the cryptocurrency market reached $103.2 billion, marking a 55.21% increase. Bitcoin's dominance stood at 61.1% and Ethereum's at 10.4%, according to the latest figures. The fear and greed index for cryptocurrencies labeled the market at 40, indicating neutral sentiment.
Throughout the day, Bitcoin recorded a low of $93,731 and was trading at $94,485, showing a 1.27% decrease. Ethereum also saw declines, with its price at $2,661 after falling 4.83%. The price performance reflected Ethereum's historical peak of $4,891.70 on November 16, 2021.
Futures markets demonstrated mixed movements. Bitcoin futures for February traded down to $94,345, declining 0.35%, and March to $94,830, down 0.49%, with April falling to $95,045, down 0.94%. Conversely, Ethereum's February futures rose to $2,654.50, up 1.09%, with March at $2,672.00, up 1.00%, and April at $2,693.50, rising 0.94%.
Market conditions showed notable fluctuations amid broader dynamics. With recent US Treasury yields falling and the dollar stabilizing, the cryptocurrency market is continuously influenced by external financial measures. Digital asset funds reported significant movements, with over $508 million exiting last week, attributed to prevalent fears over tariff wars and inflation uncertainties affecting investor caution. Despite outflows from Bitcoin funds, XRP recorded inflows nearing $38.3 million, highlighting contrasting investor behaviors.
The road forward for cryptocurrency investors involves careful monitoring of upcoming market variables such as inflation indicators and economic stability. Tapping strategies like diversification, employing stop-loss orders, and following performance reports on significant players will be key to managing investments effectively amid the unpredictable cryptocurrency climate.