Crypto market stumbles as altcoins bleed out

If you thought crypto was due for a bounce, think again. Ether, Solana, and Dogecoin are all tumbling, and traders aren’t seeing a clear reason to step in.

Ether has now dropped over 10% in just two days, extending its recent slide during Asian trading hours. Solana is down about 15%, while Dogecoin is off 13%. It’s not just a bad couple of days—since mid-December, most tokens have lost between 30% and 80% of their value, according to digital asset manager Arca.

“Crypto is just weak, and has been for eight weeks,” said Jeff Dorman, CIO at Arca. “Equities, fixed income, and gold have completely shrugged off any data points that have been used to explain weakness. Only crypto is going lower.”

So what’s fueling the selloff? A mix of bad sentiment, memecoin scandals, and looming token unlocks.

Solana gets hit from all sides

Solana has lost about $50 billion in market value in the past month, and it’s not just from general crypto weakness. A bizarre scandal involving Argentina’s President Javier Milei and a memecoin called Libra hasn’t helped, as the coin collapsed after being linked to his campaign.

Image credit: Bloomberg

On top of that, Solana has a major token unlock coming up on March 1, with $1.72 billion worth of SOL set to hit the market, according to Messari. More supply means more selling pressure—something that’s already been weighing down the price.

“With continued unlocks and supply hitting the market, folks are just selling,” said Edward Chin, co-founder of Parataxis. “Everyone that is normally in this market is already fully long alts, and any new dollars are going into BTC, which explains its relative strength.”

Bitcoin holds up better, but it’s not exactly thriving

Bitcoin is holding its ground better than alts, dropping just 2.2% to around $91,902 as of Tuesday morning in Hong Kong. Part of that is thanks to a big buy from Strategy, which spent nearly $2 billion scooping up Bitcoin in the past week.

Still, Bitcoin’s strength is more about a lack of enthusiasm for altcoins than fresh demand. As Chin pointed out, there’s just no clear narrative right now driving new money into alts, so they continue to “bleed out.”

Crypto stocks also struggling

It’s not just tokens getting hammered, crypto-related stocks are also taking a hit. Coinbase has now closed lower for six straight days, MicroStrategy has slipped into the red for the year, and MARA Holdings dropped another 5.3% on Monday after falling 13% last week.

Meanwhile, Bybit, the exchange that just suffered a $1.4 billion hack, says it will replenish all lost funds. But even that reassurance hasn’t been enough to stop Ether’s slide.

Right now, the crypto market is in a rough spot, with weak sentiment, fading hype, and a lack of fresh capital flowing in. Until something shifts, the path of least resistance still looks downward for most altcoins.