Is the crypto bull run over?

Solana, the powerhouse of Memecoin and the major L1 blockchain network, lost billions of dollars in market value as the entire crypto market fell over 4% on Monday.

Solana (SOL) has lost nearly $3 billion in value and is down 10% over the past seven days to around $128, taking it nearly 50% away from its previous all-time high (ATH) of its 2021 peak.

Other major cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), BNB, XRP, Toncoin (TON), and Dogecoin (DOGE) also fell as much as 10% last week amid a broad market decline. The crypto fear and greed index reached a neutral level around 51 for the first time in over a month. In other words, overall crypto sentiment is uncertain as to whether the market is going to be bullish or bearish.

Crypto fear and greed index | Source: Alternative.me Where is the market heading?

Looking at previous cycles, declines of 30%-40% in the market are common, especially after the Bitcoin halving. Therefore, the ongoing declines in the market are not surprising.

Additionally, the total cryptocurrency market cap is up over 35% year-to-date (YTD), according to TradingView. By comparison, the S&P500 index is up just 15% over the same period.

Total growth in the crypto market this year | Source: TradingView

As crypto.news reported, altcoin products also recorded inflows last week. This may indicate an appetite to “buy the dip” by investors and traders interested in risky assets.

Another factor to consider in economic control measures implemented by the Federal Reserve. Despite the recent hawkish Federal Open Market Committee (FOMC) meetings, expectations for a rate cut in September continue.

Experts expect the upcoming Securities and Commission (SEC) spot Ethereum ETF approval to catalyze further growth. But decentralized finance (defi) advocates remain unconvinced about how ETFs tracking spot prices will positively impact the on-chain ecosystem.

Additionally, the dynamics brought about by the Bitcoin halving are set to create a supply shock. Since block rewards have been halved and spot Bitcoin ETFs are available with increasing demand, there simply isn’t enough Bitcoin to meet the eventual buying pressure. Analysts predict that this event will push prices even higher.