The crypto markets took a tumble on Monday as the US observed the Presidents’ Day holiday, with Solana (SOL) and XRP leading the downturn among major digital assets. Bitcoin (BTC) slipped 1.1% on the day, while Ethereum (ETH) managed to eke out a 2% gain amid the broader market weakness.
Altcoins Bear the Brunt of Selling Pressure
While the two largest cryptocurrencies by market cap held relatively steady, it was altcoins that bore the brunt of Monday’s selling pressure. Solana, which has been one of the top performing large-cap tokens in recent months, slid 4% to lead the pullback. XRP was close behind with a 4% decline of its own.
The downdraft extended beyond the major coins, with the CoinDesk 20 index – a gauge tracking the performance of the 20 largest digital assets – falling 1.29% on the day. Among mid-cap tokens, Jupiter’s JUP posted the steepest loss at 9%, still reeling from its apparent connections to the controversial Libra project.
Libra Controversy Weighs on Jupiter
The so-called “Libra coin” made headlines last week after being touted by Argentine President Javier Milei as a potential boon for small businesses. However, the token crashed shortly after issuance and now its operators are facing legal scrutiny. Jupiter’s JUP token appears to have been tainted by association, despite the project’s efforts to distance itself.
Traders Await Fresh Catalysts
Crypto market participants pointed to a lack of clear directional catalysts to drive prices on Monday, with US traders largely sitting on the sidelines for the Presidents’ Day holiday. According to digital asset firm QCP Capital, the crypto markets are primarily taking their cues from macroeconomic cross-currents at the moment.
“With no significant crypto-specific catalysts in sight, price action appears to be more macro driven particularly as the correlation between BTC and equities remains largely intact,” QCP noted in a market commentary. “However it is interesting to note that despite the macro uncertainties (tariffs, debt ceiling, inflation etc.) and the unpredictability of Trump, crypto implied vols and VIX are still trading at their lows.”
– QCP Capital
Bitcoin’s Resilience Stands Out
Amid the choppy waters for altcoins, Bitcoin has proven remarkably stable, holding steady between $96,000 to $97,000 despite the broader market turbulence. Analysts attribute this resilience to the growing presence of institutional investors, which tend to favor BTC over smaller crypto assets.
“While many altcoins are down 40-60% over the last month or so, Bitcoin’s price has proved to be surprisingly resilient, holding at around $96-97k. This is likely because its holder base has shifted towards institutional investors, and this is likely to continue,” explained Jeff Mei, COO at crypto exchange BTSE.
– Jeff Mei, BTSE
Options Traders Bide Their Time
In the crypto options markets, the top strategies have centered around Bitcoin, with the $110,000 call option on Deribit emerging as the most popular trade this month. However, open interest remains muted, suggesting options traders are content to stay on the sidelines until more concrete market catalysts emerge.
“BTC has proven to be relatively unfazed by the recent macro data…This suggests that the crypto options market is just waiting on the sidelines for concrete policy changes rather than just pro-crypto rhetoric,” QCP Capital said.
– QCP Capital
What’s Next for Crypto Prices?
As the holiday-shortened week gets underway, crypto traders will be closely monitoring the macroeconomic backdrop for clues on the near-term direction of digital asset prices. Key topics to watch include:
- US-China trade developments after the Trump administration’s recent tariff increase
- Ongoing debt ceiling negotiations in Washington
- The path of inflation and interest rates
- Potential pro-crypto policy shifts from the US government or other major economies
Absent major developments on those fronts, crypto markets may struggle for direction in the near term after a strong start to the year. However, any signs of progress on the regulatory or adoption fronts could quickly reignite bullish sentiment and send prices rallying once again.
For savvy investors, the current lull could provide an attractive opportunity to build positions in quality crypto assets at lower prices. While volatility is likely to remain elevated, the long-term growth potential of the industry remains intact. As always, doing your own research and maintaining prudent risk management remain essential to navigating the dynamic crypto markets.
