Investors Dumping Altcoins As Crypto Rally Pauses

cryptocurrency prices extended its slide to 7% for the week, with declines across the board, but concentrated in tokens other than market leaders bitcoin and ether as investors seem to be adopting risk aversion strategies.

Bitcoin
BTC
and ether now account for 63% of the total cryptocurrency market of $1.24 trillion, up from 55.8% at the end of last year. This week's pullback comes after the market rallied from a low of around $828 billion in late 2022, a year of widespread bankruptcies and other disruptions for digital assets.

Risk-off sentiment was evident in the bond market on Thursday, where the yield on the 10-year Treasury fell 6 basis points to 3.55%. Investors seem to be reacting to the possibility of the United States defaulting on its debt like the White House and House Republicans. battle for raising the loan ceiling. The United States reached its legal limit of $31.4 trillion in January, but the Treasury has been able to avoid a crisis with emergency spending cuts.

Ironically, buyers are flocking to the very defaulted bonds, accepting lower and lower yields as the situation in Washington unfolds. Treasuries, however, often find favor in tumultuous markets. Short-term yields are higher, up to 5.06% for three-month Treasuries, an unusual situation compared to bonds with longer maturities that can herald a recession.

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While broad stock market averages were only a fraction lower, crypto mining stocks took a hit. CleanSpark, a sustainable bitcoin miner, leads the pack with a 10.7% decline. Riot Platforms, Bitfarms, and Marathon Digital all fell more than 8%, repaying some of the 40% rise the sector saw. last week after investor confidence in the digital asset sector turned positive.

Microstrategy, the enterprise software company with The 140,000 token share of bitcoin fell 6.3%, worse than the underlying cryptocurrency itself. Bitcoin itself fell 3.6% to $28,234.55 per coin. The leading cryptocurrency briefly peaked Tuesday at $30,365 before a steady decline took it to a 10-day low.

Ether followed suit, falling 2% to $1,938.37. Ether fell more slightly than bitcoin due to withdrawals of staked cryptocurrencies that had been locked on Ethereum
ETH
blockchain remained modest at about $1.6 billion out of the total $38 billion, according to data provider Nansen. Some of those coins were frozen since December 2020, but were released as part of the most recent Ethereum updates.

Ethereum gas fees have also risen in the past week, largely due to memecoin minting. The average gas fee, a transaction fee paid to the Ethereum network, rose to 81.94 gwei on Wednesday, more than doubling from Monday. A gwei is a fraction of an ether, equal to one billionth of a coin.