Crypto prices are collapsing across the board, ripped off by Bitcoin and Ether

The crypto markets are deep in the red. Over the past week, digital assets have lost more than 10% from their collective capitalizations – representing more than $111 million in lost nominal value.

Bellwether digital asset bitcoin (BTC) fell 8% this morning, as did number two ether. BTC fell below $21,500 – more than 10% below the price recorded last Friday.

BTC had just broken a two-month high over the weekend when it rose above $24,500.

Ether (ETH) also lost 10% in the past week, falling from nearly $1,900 to $1,700. All the while, the US dollar index DXY has risen and the dollar is poised for parity with the euro for the second time in six weeks.

Open interest in bitcoin futures fell about 8% in the past 24 hours, from about $14.1 billion to just over $13 billion, after holding steady over the past week, according to CoinGlass. Open interest in ether futures has declined about 9% over the past seven days, from $9.15 billion to $8.3 billion.

Open interest usually coincides with strong moves as speculators’ positions as surrendered are liquidated en masse.

ETH’s spot price remains positive for August so far, having retained 1% gains from 12:00 PM ET, while BTC fell 8%. Both assets have lost more than half their value so far this year.

Only three digital assets out of the top 50 by market capitalization (excluding stablecoins and packaged assets) saw their prices rise over the past seven days: Meme-powered shiba inu (SHIB) rose nearly 5% while native crypto exchange symbols unus sud leo (LEO) and okb jumped 10% and 1% respectively.

For scale, the top 50 digital assets lost 15% on average in the past week.

Exchange tokens seem strong, but bitcoin and ether still drive the markets

As Blockworks has previously reported, Bitfinex’s LEO has consistently outperformed the market this year. In fact, LEO is up 37% through 2022 – a year that has seen crypto markets up 53% overall.

The token has been backed by an attractive buyback-and-burn mechanism that could be accelerated if US authorities return billions of dollars in bitcoin stolen from the platform in 2016.

OKCoin’s okb has a similar burning system, which reduces supply along with trading volume.

But Vivek Raman, head of proof-of-stake at crypto services unit BitOoda, told Blockworks that one shouldn’t read too much into the exchange’s tokens right now.

“The last market rally was led by ETH, and the exchange tokens lagged during that rally,” Raman said. “Therefore, on a move lower, it makes sense that ETH and BTC lead the way down and the exchange tokens lag behind.”

“My guess would be that if we see a prolonged drawdown, exchange tokens will underperform again.”

While Raman noted the recent meme coin rallies marked some bullish sentiment, he described moves made by SHIB, OKB and LEO as “just noise.” The true crypto fundamental plays are still powered by bitcoin and ether.

And so, 15 of the top 50 digital assets lost more than 20% – led by graphene (-25.5%), thorchain (-24.5%), apecoin (-24%), near (-23.5% ) and flow (- 23.5%).

Traders flocked to stablecoins to hedge against volatility. Over the past week, the top four stablecoins (tether, USD coin, binance usd and dai) have seen their shared market dominance jump 11 percentage points, from around 11.5% to 12.75%.

Bitcoin and ether dominance, on the other hand, have remained relatively flat.

The NFT market is facing settlements and liquidations

In terms of NFTs, the floor prices for both CryptoPunks and Bored Ape Yacht Club tokens are down 11% for the week, reaching 65.95 ETH ($111,600) and 69.69 ETH ($117,900) respectively.

The outlook for non-fungible tokens (NFTs) is even worse when you zoom out: Delphi Digital reported yesterday that NFT collections listed on lending protocol BendDAO collapsed 18-39% over the past 30 days – putting borrowers at risk of to have the NFTs liquidated unless they repay their debts immediately.

Raman said: “APE and FLOW are notable underperformers as the NFT market has entered a pretty vicious price slide. There have been concerns about liquidations around Bored Apes, and apecoin is a proxy for NFT activity.”

He also noted that FLOW’s weakness makes sense with broader NFT softness, as its main focus is to support the NFT ecosystem. Raman sees the recent pullback as a chance for healthy consolidation ahead of the merger, which “provides idiosyncratic alpha upside for ETH and should be a near-term catalyst for the space.”

Jeff Dorman, chief investment officer at digital asset management firm Arca, reasoned that the biggest takeaway from the past week is that virtually all tokens fell in a risk-off week for all risk assets.

This was the first time we have seen a broad market response since the market bottomed out in mid-June, Dorman said.

“Prior to this week, over the past 6 weeks, we saw much wider spread, with big winners and big losers each week, with market leaders in their respective sub-sectors leading the way higher,” he said.

Crypto markets are really gloomy, but stocks aren’t too hot either. The benchmark indices, the broad S&P 500 and the technology-heavy NASDAQ 100, are both shaky after a few strong weeks – down 1% and 2% respectively.

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