Cryptocurrency Market Faces Turbulence: Layer 2 TVL Drops, Bitcoin and Ethereum Decline
The cryptocurrency market is currently experiencing significant turbulence, with total value locked (TVL) on Layer 2 networks dropping to $8.92 billion, down from $10.54 billion yesterday. This decline highlights the ongoing volatility that has characterized the market recently.
Examining the top five Layer 2 networks, we see notable decreases in their TVL:
- Base: Current: $3.41B, Yesterday: -12.37%
- Arbitrum: Current: $2.89B, Yesterday: -13.96%
- Optimism: Current: $703.89M, Yesterday: -14.42%
- Blast: Current: $468.88M, Yesterday: -19.65%
- Mantle: Current: $448.77M, Yesterday: -16.80%
In the broader market, Bitcoin (BTC) is currently priced at $95,444, down from $97,932 yesterday. Ethereum (ETH) follows suit at $3,316, a decline from $3,442. This downturn has led to a shakeup in the crypto market, with over $1 billion in leveraged positions liquidated as traders were caught off guard by the sudden volatility.
Despite the market's struggles, some entities are seizing opportunities. El Salvador has taken advantage of the dip by purchasing $1 million worth of Bitcoin, acquiring 11 BTC shortly after the International Monetary Fund (IMF) urged the country to scale back its crypto investments.
On the fundraising front, the crypto sector has seen a robust influx of capital today, totaling $112.80 million. The largest round comes from ALLO, which raised $100 million. Other notable rounds include Kettle Finance at $4 million and FLock at $3 million. Cumulatively, the week has seen $1.50 billion in fundraising, indicating continued interest and investment in the sector despite recent challenges.
In the context of macroeconomic factors, the Federal Reserve's preferred inflation gauge has fallen more than expected, providing some relief to markets. Traders are hopeful that this easing of inflationary pressures may stabilize the economic environment, potentially benefiting the crypto market in the long run.
In related news, Acurast has launched the Processor Lite for iOS, allowing iPhone users to engage in decentralized cloud computing. Additionally, Chainalysis has acquired Web3 security firm Hexagate, marking a strategic move towards enhancing threat prevention in the crypto space.
