While the stock market is closed today, recognizing Labor Day, the crypto market is bleeding.

For now, in another red day to mark the start of a new week, cryptocurrencies had a repeat performance. Much like last week, bitcoin dropped below $10,000 to as low as $9,880 on Bitstamp, albeit briefly.

The ‘real’ trading volume meanwhile remains weak at just $1.4 billion.

“One more flush before a bounce seems likely. Stocks probably go up tomorrow. Corn could rally with it,” said one trader.

However, if we look back at the last bull cycle, the average correction is 35%. Given the fact BTC has only retraced 20% so far, another drop could see us below $8,000.

Meanwhile, Bitcoin’s Spent Output Profit Ratio (SOPR), which highlights when the average stakeholder is in a state of profit or loss, dipped below 1 for the first time since April. Currently, it is hovering right at the neutral line. Rafael Schultze-Kraft CTO at crypto data provider Glassnode noted,

“This means bitcoins moved on-chain at a (small) loss, potentially shaking out some weak hands. Imo it is very crucial to hold this level here so a bearish trend reversal doesn't get confirmed.”

While bitcoin is at the precipice, Ether is getting beaten hard. The second-largest cryptocurrency lost nearly 35% of its value last week to drop to $320. Currently, ETH/USD is around $335. Analyst Rekt Capital said,

“Indeed the $360 has switched into a resistance, offering lower prices. Price breaks back into the $160-$360 range. Very low $300s is a real possibility going forward. $290 would be perfect.”

The spark plug for these losses was a decline of 6.1% in the Ether balance on top 100 exchanges, from 16.92 million to 15.89 million over the past week.

Last week, before crashing, ETH price jumped to a new 2020 high last seen in June 2018, which led to an increase in this exchange's balance as investors and traders took off some profits.

The good thing is, despite the drop in price, the Ethereum network keeps on growing, with the number of addresses with a balance in ETH hitting a new all-time high on the weekend at 45.88 million addresses, as per data source IntoTheBlock.

This means people are buying the dips. These addresses have increased by 34.8% since the beginning of 2020.

The silver lining to this plunge in ETH price is “DeFi will yet again benefit from the temporary collapse in Ethereum gas fees, and the vicious loop of chasing higher yield will resume yet again until the pressure cooker can no longer hold,” said Denis Vinokourov of Bequant.

A crash in Ether prices is not good news for altcoins, especially DeFi tokens.

However, unlike last week’s 10% to 20% losses, the altcoins are down 2% to 10% today. Among the top altcoins, LINK with 3.70% gains and BSV 5.97% are the only exceptions.

As for the DeFi tokens, in the past hour, they all have turned green fast with CRV, SRM, and JUST up 8%.

But in the past 24 hours, SNX and CRV are down over 11%, RUNE 9.4%, SRM 9.3%, YFI 8.5%, KAVA 8.1%, BAND 7.2%, REN 6.6%, LRC 5.1%, KNC 4.7%, LEND 3.1%, COMP 1.7%, AMPL 1.4%, and WBTC 1%.

The biggest loser in the past seven days has been Ampleforth, which lost over 63% of its value with other notable mentions, including Melon (50%), Bancor (47%), and Curve (46%), as per CoinGecko.

As a result, the total value locked in the DeFi sector also dropped by 21% to $7.5 billion.

the most gut wrenching pattern I’ve ever seen

3 higher highs and 3 higher lows followed by a massive blow-off top that immediately nukes below 2-3 lower lows

it goes from very strong up-trend to a lot of people being trapped in alts pic.twitter.com/KxBevPZ5lw

— CryptoGainz (@CryptoGainz1) September 7, 2020

While more losses could be in order, depending on Bitcoin’s next move, which itself is waiting for the stock market, trader and economist Alex Kruger says the “alts apocalypse” the market experienced “won't happen again even if BTC were to go down.”

Alts apocalypse was the leading digital currency losing 5% of its value resulting in alts crashing 20-50%, which was “extraordinary” because “Multiplier is usually in the 1.5-3x, not 4-10x.”

“Feel confident alts bottomed. BTC may flirt again with 9Ks. But alts bottomed. What the market saw yesterday was total obliteration. Strong hands remained, weak hands folded,” said Kruger.

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The post Bitcoin Crashes Below ,000, Is The 'Altcoin & DeFi Apocalypse' Over Yet? first appeared on BitcoinExchangeGuide.

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