After a stellar start to the week, the global digital currency ecosystem is now experiencing a significant bearish correction. Per data from CoinMarketCap, the combined market capitalization is now down by 3.06% to $1.10 trillion at the time of writing.
This bearish slump was fueled by a 3.68% drop in the price of Bitcoin (BTC), which pegged the premier cryptocurrency at $24,073.41 per unit. Ethereum (ETH) also shed 3.63% of its value to $1,642.19, while Polygon (MATIC) ranked as the worst performer among the top 10 altcoins with an 8.43% slump to $1.35.
Bearish as it looks, top crypto analyst Ran Neuner said the market is actually very bullish when compared to the broader U.S. stock market.
This market is exceptionally strong given the moves in the US stock market.— Ran Neuner (@cryptomanran) February 21, 2023
While the tech-heavy Nasdaq Composite Index is down by 2.50%, the Dow Jones Industrial Average has shed over 697 points in what appears to be one of its worst daily closes since the start of the year.
The broader market is still recording conflicting outlooks as regards inflation, and while the crypto slump is a concerning one, it is just a reflection of the highly correlated financial market.
Are critics right?
Ideally, the typical market cycle often involves periods of highs and lows, and in the eyes of the industry's proponents, this is just a mere natural correction.
To critics like Peter Schiff, however, this might be the start of an impending relapse of all the gains the industry has accrued since the collapse of the FTX Derivatives Exchange. It will not be surprising to find vocal critics like Jim Cramer put out a call to his followers to find a timely exit in order to minimize their losses.
The industry is used to shock, and the recent historical trend shows the current fall is billed to be temporary.