The crypto market has suffered a massive downturn, losing over $325 billion since Friday, with $150 billion wiped out in the past 24 hours alone. A staggering $100 billion vanished in just one hour today, marking one of the most intense market corrections in months.
Solana Leads the Sell-Off as Memecoin Frenzy Fades
According to The Kobeissi Letter, the market downturn began with Solana (SOL), which has plunged 22% since Friday. The memecoin hype that fueled SOL’s price in late 2024 has cooled, leading to sharp declines across the ecosystem.
As Solana’s momentum faded, Bitcoin (BTC) followed suit, losing its relative strength against the S&P 500, which also pulled back on Friday. Earlier today, Bitcoin dropped below the critical $90,000 support level, further reinforcing bearish sentiment across the market.
Bybit Hack Triggers Further Selling
The market was already fragile before the Bybit hack, but the incident further intensified selling pressure. On February 21, Bybit lost over 400,000 ETH from its cold wallet, making it the second-largest hack in crypto history.
Ethereum (ETH), which was already showing weak momentum, took a further hit following the hack:
- ETH opened at $2,740 on February 21
- Dropped to $2,408 at the time of writing, marking an almost 12% decline
Citadel’s Crypto Liquidity Pivot Met with Market Sell-Off
Adding to the complexity, Citadel Securities’ $65 billion move into crypto liquidity was expected to boost market confidence. However, traders instead reacted with a “sell the news” response, deepening the market’s losses.
Is There a Path to Recovery?
Despite the widespread market panic, analysts at The Kobeissi Letter remain optimistic:
“We have seen countless -10% pullbacks in Bitcoin over the course of this bull run. Technical pullbacks are healthy. However, since crypto markets thrive on liquidity, a sustained reduction in risk appetite could keep pressure on prices.”
Bybit Replenishes Funds, Could Ethereum Rebound?
A potential silver lining came when Bybit CEO Ben Zhou announced on February 24 that the exchange had fully covered its losses and published a proof-of-reserves audit to reassure users.
Analysts at Bitfinex suggest that Bybit’s replenishment of customer funds may lead to large Ethereum purchases, which could:
- Counteract some selling pressure
- Stabilize ETH prices
- Potentially trigger a short-term bounce
If Bybit acquires ETH through the open market, it could have a positive impact on Ethereum’s price in the coming days.
What’s Next for Crypto?
Despite Bybit’s recovery efforts, uncertainty remains high. Bitcoin, Ethereum, and Solana have all declined in February, following their late 2024 rallies.
- Memecoins have dropped 37.4% after December’s surge.
- Monthly crypto open interest has fallen, as traders reduce leveraged positions amid rising volatility.
According to Bitfinex analysts, the next major movement in Bitcoin and the broader market will depend on macroeconomic factors, including:
- Risk appetite among institutional investors
- Global liquidity conditions
- Regulatory developments
For now, crypto investors are bracing for further turbulence, as the market navigates a critical correction phase.
