why is cryptocurrency falling so fast
The cryptocurrency market has fallen to new levels in the current year (13th June 2022). The market value of the global has fallen from $1 trillion to $977 billion. This is a roughly 12 percent lower than yesterday. The market cap of cryptocurrency worldwide has dropped by about $1 trillion in the past year, and the majority of top coins are currently worth half or less than their record highs."why is cryptocurrency falling so fast"
The primary trigger for the crash in crypto appears to be a huge selling by investors due to increased inflation concerns and a halt of withdrawals by cryptocurrency loans Celsius. Investors continue to stay clear of the more risky investments, which can be seen in the markets for stocks too.
Bitcoin is the biggest and most popular cryptocurrency has dropped below $22,000, while nearly all altcoins starting with Ethereum are sagging in value over the past week.
Ethereum has dropped to its lowest point since more than 14 months, with prices hovering around $1155. Solana has dropped more than 15 percent and is hovering near $27 as per CoinMarketCap data as of the time of writing.
Experts believe that the recent price declines in crypto indicates a declining risk-aversion of investors. They are now concerned about the risk of investing in risky assets. With all the uncertainties and volatility crypto is seen among the most risky instruments to use for investing purposes.
"The crypto market has come under pressure by the Federal Reserve, hiking the interest rates to fight inflation in the last few months. Bitcoin, Ethereum, and the majority of cryptocurrency suffered losses over the weekend due to an extensive sell-off after the report that showed US inflation at an all-time high of 40 years," said Edul Patel Co-founder and CEO of the cryptocurrency investment platform Mudrex.
"As investors be in panic mode, the volume of liquidations of cryptocurrency has been on the rise since Friday. Bitcoin and Ethereum dropped as high as 7 percent each, and are in the lowest position, between USD$25,000 to US$1,300. The trend of bearishness could persist in the coming weeks," he added.
Altcoins have in the past not performed as well as Bitcoin However, this time they are under the pressure of regulatory hurdles. The report of CoinDesk said that an expert was declaring that only a tiny percentage of altcoins could be able to withstand these market fluctuations.
Shivam Thakral, CEO of the crypto exchange BuyUcoin stated that the increasing prices for gas, food, and energy costs are putting immense pressure on the crypto market, as Bitcoin as well as Ether have suffered losses in the double digits within the last 24 hours.'why is cryptocurrency falling so fast'
"After the consumer price index reported the highest inflation since 1981, financial markets across the globe have seen a sharp downturn," Thakral said. Thakral.
"The market is likely to remain volatile over the coming weeks as nations around the world continue to announce significant inflation figures. The current decline in cryptocurrency prices is allowing buyers to purchase crypto at 2021 prices , and we anticipate the experienced investors to benefit from the price drop," he added.
As per Darshan Bathija, CEO of cryptocurrency exchange Vauld, the majority of investors are concerned that, unless inflation rates drop soon and then the US Fed might have to tighten the reins by raising interest rates at a greater speed than previously thought.
Bitcoin in Oversold Zone
"Bitcoin was hit by another major decline, falling to $25,000. This is the lowest it has been in the past five months. It is interesting to note that The Dollar Index(DXY) is also at a six-month peak, increasing by an additional 2% over the course of the day, resulting in dropping in the stock and crypto markets. In the daily time-frame, the BTC trend has shifted below the long-formed triangle pattern. A key and immediate support level is anticipated at $24,000. The RSI fell below 30 as Bitcoin was in the oversold area," analysts at WazirX Trade Desk have shared in a post.
However, Ethereum corrected by over 20% in the past week. Meanwhile, Ethereum against Bitcoin declined by over 11% over the same time frame as Bitcoin's Dominance crossed over the 48% mark for only the second time in over one year.
"The daily chart of ETH-BTC has broken above the descending channel pattern and is now below the prior support level of 0.055. The next support level for Ethereum-BTC is anticipated to be at the 0.038 levels," the source said.
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