Crypto Market Sees Heavy Losses as Solana Falls 14%, XRP and Dogecoin Drop 8%

Crypto Market Nosedives as Bitcoin Drops Below $92K, Solana Leads Losses

The crypto market took a sharp downturn on Tuesday, extending Monday’s losses as bearish sentiment and economic uncertainty weighed on investor confidence.

Solana (SOL) plunged 14% in the last 24 hours, pushing its weekly decline past 20%. Ethereum (ETH), Dogecoin (DOGE), and XRP (XRP) also posted losses of over 8%. Bitcoin (BTC) dropped below the $92,000 mark for the first time since November, raising concerns about a potential breakdown from its long-standing trading range between $90,000 and $110,000.

The broader crypto market wasn’t spared either, with total market capitalization slipping 6.6%, and the CoinDesk 20 Index (CD20) shedding over 7%.

Despite the sell-off, some analysts suggest that the market’s bearish reaction might be exaggerated, with macroeconomic developments playing a crucial role in shaping the next move.

“Crypto is oversold at these levels,” said Jeff Mei, COO of crypto exchange BTSE. “Investor sentiment has been dampened by concerns over inflation and delays in the Federal Reserve’s interest rate cuts. However, recent weak economic data could push the Fed toward policy easing, which may spark a rebound in risk assets, including Bitcoin.”

Augustine Fan, head of insights at SignalPlus, echoed the sentiment, noting that traditional markets are also experiencing volatility. “We’re seeing stocks and bonds trading in closer correlation, signaling growing uncertainty. If economic conditions worsen, we could see a renewed bid for safe-haven assets like Bitcoin and gold.”

Economic data released earlier this month revealed that U.S. inflation remains stubbornly high, with the Consumer Price Index (CPI) rising 0.5% in January—above the expected 0.3%. The unexpected jump has forced investors to take a cautious approach, reducing exposure to risk assets while awaiting clearer signals from the Federal Reserve.

With macro uncertainty at play, all eyes remain on upcoming economic reports and policy decisions that could dictate the next move for Bitcoin and the broader crypto market.