Crypto Market Extends Losses as Solana Drops 14%, Bitcoin Slips Below $92K
The cryptocurrency market continued its downward trend, with major assets tumbling as much as 14% in the past 24 hours. A lack of bullish catalysts and prevailing bearish sentiment kept prices under pressure as Monday’s sell-off spilled into Tuesday.
Solana (SOL) led the declines, falling 14% and extending its weekly losses to over 20%. Meanwhile, dogecoin (DOGE), XRP, and ether (ETH) each dropped more than 8%. Bitcoin (BTC) fell below the $92,000 mark for the first time since late November, raising concerns of a potential breakdown from its long-held consolidation range of $90,000 to $110,000.
The total crypto market capitalization shrank by 6.6%, while the CoinDesk 20 Index (CD20), which tracks the largest and most liquid digital assets, plunged over 7%.
Despite the sharp declines, some traders believe the market downturn may be exaggerated and that macroeconomic developments will play a crucial role in shaping the next move.
“Bitcoin, Ethereum, and Solana are trading significantly below their all-time highs, which doesn’t align with broader market conditions,” said Jeff Mei, COO of crypto exchange BTSE. “Inflation concerns and the Federal Reserve’s pause on rate cuts have weighed on sentiment, but that could shift if weak economic data prompts officials to act.”
SignalPlus head of insights Augustine Fan echoed this outlook, noting that the narrative of an economic slowdown will likely dominate in the short term. “Stocks and bonds are starting to move in positive correlation again, nearing the highest levels of the past year,” he explained.
Fan also pointed out that poor economic data could work in Bitcoin’s favor. “The ‘bad data is good’ dynamic is back—if markets anticipate Federal Reserve intervention, assets like gold and BTC could benefit.”
Earlier this month, data showed that the U.S. Consumer Price Index (CPI) surged 0.5% in January, exceeding the expected 0.3% rise. This inflation spike led investors to adopt a cautious approach, favoring cash holdings and risk-off positions until clearer signs of economic stimulus emerge.
As a key measure of inflation, the CPI’s impact extends to Bitcoin and the broader crypto market, as investors increasingly view digital assets as a hedge against rising prices.
