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This Week In Crypto: Market Meltdown Wipes Out Billions

Story Highlights

The broader market is again tumbling as fears of DeFi insolvency emerge as one of the key catalysts for coins shedding value at an alarming rate. Within a week, the aggregate crypto market capitalization has sunk below $1 trillion, triggering panic and liquidations.

Bitcoin Wobbles Further

Bitcoin (BTC-USD) has lost about 30% of its value over the past seven sessions, currently hovering around the $21,000 handle. The multi-month consolidation has taken its toll on the largest cryptocurrency by valuation, triggering massive sell-offs and liquidations.

Although BTC jumped 8% on June 15 following the Federal Reserve’s latest 0.75% interest rate hike – the largest since 1994 – short-term panic selling isn’t showing any signs of abating. Meanwhile, crypto lending firm Celsius’ recent action to “temporarily halt” withdrawals and crypto venture firm Three Arrows Capital (3AC) hinting at possible insolvency added more fuel to the fire.

On-chain data indicates that most macro indicators suggest the market is entering its deepest phase of the ongoing bear cycle. The Bitcoin NUPL (net unrealized profit and loss), according to CryptoQuant, has dropped below zero – a sign that BTC may be approaching another new bottom. 

CryptoQuant’s data highlighted that users across 21 leading crypto exchanges transferred billions worth of BTC (59,376 BTC to be precise) to their wallets en masse on June 14. According to the report, this event marked the largest inflow since November 2018, potentially foreshadowing further selling pressure that will continue to impact the leading crypto by capitalization.

Altcoins Caught in a Downward Spiral

The altcoin market hasn’t been able to sidestep losses over the last week. Among the top coins by capitalization, Ethereum (ETH-USD) has given up nearly 38% of its value and is currently sitting near $1,100 after touching the lowest levels since the outset of the year.

At the same time, stETH (staked Ethereum) on the Lido platform dropped to lows near $950, further feeding ETH’s downtrend. A report from Coinglass suggests that around $71 million worth of ETH positions have been liquidated in the past 24 hours.

Other altcoins are also facing the heat, with nearly every peer registering double-digit dips over the past seven sessions. Binance Coin (BNB) is down about 25%, while Cardano (ADA) has lost 22%. Ripple (XRP), Solana (SOL), Polkadot (DOT), TRON (TRX), Avalanche (AVAX), Polygon (MATIC), Monero (XMR), and Tezos (XTZ) are among the tokens that have lost the most value this week, dragging the global crypto market cap back beneath the $1 trillion mark.

That said, cloud-based blockchain infrastructure provider Chain.com (XCN) underperformed the lot, plunging almost 96% in a “flash crash” triggered by a market maker and API error.

Theta Network Fends Off Bearish Influences

While most cryptocurrencies are suffering extensive losses and deep pullbacks, low and mid-capitalization altcoins are putting up the biggest fights. Ranked 39th in CoinMarketCap’s list of cryptocurrencies by market capitalization, THETA has been able to hold on to its value, despite worsening market conditions.

At a point where most cryptocurrencies are deep in the red after the last week, the THETA token has only declined around 13% on a seven-day moving basis. This outperformance of the broader market comes at the heels of the Theta Network teaming up with Resorts World Las Vegas to release composite NFTs that will offer luxury experiences to buyers.

Layoffs & Clarifications as Market Conditions Deteriorate

Amid the market meltdown, crypto platforms BlockFi, Crypto.com, and Coinbase (COIN) have announced massive layoffs as they try to stay afloat. Per the latest reports, Crypto.com has reduced its workforce by 5%, BlockFi is planning to slash around 20% of its team, and Coinbase is letting go of nearly 18% of its staff. 

At the same time, Binance CEO CZ (Chanpeng Zhao) has announced that his company intends to make the most out of the ongoing bearish cycle. CZ stressed that, unlike competitors, Binance isn’t planning to splurge money on marketing gimmicks but use it to recruit top talent and expand the platform’s global presence.

Binance’s co-founder Yi He told Fortune that the exchange is actively hiring for more than 2,000 roles across engineering, business development, and marketing.

Meanwhile, Tether – the stablecoin giant – has clarified that it will eventually eliminate all commercial paper backing its USDT stablecoin. To quell questions about its practices, the Tether team has also issued an official statement dispelling allegations about its commercial paper portfolio being backed by Chinese and Asian companies.

Finally, TRON’s USDD stablecoin dipped to $0.97 across major trading platforms earlier this week. While the market is still licking its wounds from Terra’s UST catastrophe, TRON DAO has added $700 million to maintain the peg and avoid a similar outcome.

Disclosure 

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