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Crypto Crash Reason (6/13): Why Are Cryptocurrencies Crashing Today? experts speak

Why are cryptocurrencies crashing today? Cryptocurrency markets have plunged today to a new low this year. The global market capitalization has shrunk to $1.02 trillion from $1.10 trillion recorded yesterday. The global cryptocurrency market capitalization has fallen by around $1 trillion this year, while nearly all major coins are now worth half or even less than their all-time highs.

The immediate trigger for the cryptocurrency crash appears to be a sell-off by investors amid rising inflation fears. Investors also continue to move away from riskier assets, which is also reflected in the stock markets.

Bitcoin, the largest and most popular cryptocurrency, has fallen to $25,586, while almost all altcoins, starting with Ethereum, have been bleeding prices since the weekend.

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Ethereum has fallen to its lowest level in over 14 months, currently trading at around $1,350 at the time of writing. Solana has fallen almost 30% and is around 29 dollars.

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Experts say that the fall in the price of cryptocurrencies indicates a decrease in investors’ appetite for risk. They clearly distrust risky assets. With all its uncertainties and volatilities, cryptocurrencies are considered to be one of the most volatile instruments for investment purposes.

“The crypto market has been under pressure from the Federal Reserve, raising interest rates to combat inflation in recent months. Bitcoin, Ethereum and most other cryptocurrencies suffered losses over the weekend after a sell-off after data showed US inflation hitting a 40-year high,” said Edul Patel, Co-Founder and CEO. executive of the crypto investment platform Mudrex.

“As investors seem to have panicked, the number of cryptocurrency liquidations has been high since Friday. Bitcoin and Ethereum plunged as much as 7% each and are currently trading at their lowest levels at US$25,000 and US$1,300. The downtrend is likely to continue in the coming days,” he added.

While altcoins have historically underperformed Bitcoin, this time they are under additional pressure from potential regulatory hurdles. A CoinDesk report quoted an expert as saying that only a small number of altcoins are likely to survive such market moves.

Shivam Thakral, CEO of crypto exchange BuyUcoin, said rising food, gas and energy prices are putting enormous pressure on the crypto market as Bitcoin and Ether have seen double-digit losses over the last 24 years. hours.

“After the consumer price index reported the highest inflation since 1981, financial markets around the world have seen a sharp decline,” he said. Thakral.

“The market is expected to remain choppy in the coming weeks and countries around the world continue to report high inflation figures. The current drop in crypto prices allows investors to buy crypto at 2021 prices and we expect experienced investors to take advantage of the drop,” he added.

According to Darshan Bathija, CEO of crypto exchange Vauld, most investors are concerned that unless the inflation numbers start to fall soon, the US Federal Reserve will be in control.

Bitcoin in oversold zone

“Bitcoin faced another significant correction, falling to almost $25,000, the lowest level in more than 5 months. Interestingly, the dollar index (DXY) is also at a six-month high, gaining 2% in the last day alone, leading to a drop in the stock and crypto markets. On the daily time frame, the BTC trend has broken below the long-running triangle pattern. Immediate and key support is expected at $24,000. The RSI dipped below 30 as Bitcoin entered the oversold zone,” WazirX Trade Desk analysts shared in a note.

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Meanwhile, Ethereum corrected by more than 20% over the past week, while Ethereum against Bitcoin fell by more than 11% in the same period as Bitcoin Dominance topped 48% for the first time in nearly a year.

“The daily chart of ETH-BTC has broken below the descending channel pattern and has dropped below its previous support at 0.055. The next support for ETH-BTC is expected at the 0.038 level,” they said.

(The article has been updated for some grammatical and factual errors)

(Cryptocurrencies and other virtual digital assets are not regulated in India. They are considered extremely risky for investment. Please consult your financial advisor before making any investment decisions)

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