Nevertheless, as of Monday evening, the bitcoin value had plunged back to $31,000, and the general crypto market capitalization was back down to $880 billion. Strangely, not everyone is upset by that drop.
Those with lots of money invested in bitcoin could be happier, but a few financial analysts and experts have termed the slump as a ‘healthy correction’ after the crypto had surged to some unsustainable levels.
Whilst the crypto experts may term it as an example of the traditional finance fearing the unknown, the Bank of America had already warned last week that the explosive surge of bitcoin might be the ‘mother of all bubbles,’ and they drew a comparison with the tech boom of the 1990s.
Naeem Aslam, the Chief market analyst at AvaTrade, told CNN that the plunge was a welcome price action that was due a long time ago.
It is currently trading at $29,200 which is the lowest since January 2021, Edul Patel, CEO and Co-founder, Mudrex.
“Bitcoin is likely to break below the current level testing its support once again. It seems like investors and institutions have paused after Terra’s crash and are a little hesitant to return to the market,” he added.
Markets continue to range bound, thanks to rising inflationary worries, geopolitical uncertainty, and global economic slowdown expectations, said Kunal Jagdale, founder, BitsAir Exchange.
“There is no optimism for the crypto space in near term, he added.
The Central Bank of Russia, mirroring Chinese authorities, stated that this step would boost economic security, mental health and restore sovereign monetary authority.
The central bank claimed that speculative demand drove cryptos’ fast expansion and resembled an economic pyramid, signaling the risk of industry bubbles endangering economic independence and citizens.
According to the proposition, banks should not be allowed to interact with cryptos. It further said that technologies are being designed to prohibit on and off ramps and a cryptocurrency exchanges restriction.
Solaris Group’s Head of Financial Strategy, Joseph Edwards, downplayed the proposal’s macro impact. According to Edwards, Moscow has made similar threats in the past; however, compared to China, Russia hasn’t ever been a major cryptocurrency marketplace.
The vice president of product strategy at TradeStation Crypto, James Putra, mentioned:
“It’s scary when the price of bitcoin just goes straight up. This pullback was needed.”
The Bitcoin Surge
At the start of 2021, the world’s biggest and most popular crypto was in the doldrums with prices dropping to around $3,850 in March, before the coronavirus pandemic had a major effect on the global financial outlook.
There were fears of surging inflation and the probability that the dollar may be debased, which pushed investors into the bitcoin space searching for a crash-proof investment.
However, the total cryptocurrency trading volume surged about 35 per cent to $83.81 billion. What’s cooking India Rohit Jain, the head of the recently launched CoinDCX Ventures, is swamped with pitch decks from aspiring crypto entrepreneurs even as the chorus of a long and harsh crypto winter grows stronger by the day.
Unfazed by a severe crypto market crash, the imposition of a high income tax rate by the Indian government, a massive dip in trading volumes, the collapse of a popular token and continuing global uncertainty around digital asset regulation, Indian entrepreneurs have continued launching scores of new crypto ventures supported by strong angel funding. Expert take Bitcoin is seeing bearish consolidation since early April, and it has been trading in a tight range for the past few weeks.
Cryptos dropped despite the rise in stocks in Monday trading. Markets are still spooked by the rising inflation and looming recession.
Majority of the crypto tokens were trading lower on Tuesday.
BNB and Tron were the only two players rising, whereas Bitcoin and Ethereum were among the top losers. Avalanche and Solana dropped 5 per cent each.
The global cryptocurrency market cap was trading higher at the $1.26 trillion mark, dropping as much as 2 per cent in the last 24 hours.
Cryptos have majorly been tracking equities for the movement and investors might see some relief rallies on for a brief period on periodic intervals.” Global updates South Korean police are moving to freeze Luna Foundation Guard’s money in the wake of this month’s TerraUSD (UST) stablecoin collapse, according to a Monday report from KBS news.
Japanese bank Sumitomo Mitsui Trust will form a new company to offer digital asset custody services to institutional investors, according to a report by Nikkei Asia.
About a dozen per cent of adults held cryptocurrency in 2021, according to a Federal Reserve study measuring the economic health of US consumers.
Tech View by Giottus Crypto Exchange Solana (SOL) is a promising layer-1 solution and one of the top contenders of Ethereum.
The Fear & Greed Index fell 5 points from 20th January to 21st January, down from 24-19.
Social media posts indicate a combination of gathering cries to hold on, including claims that this is the last chance to purchase Bitcoin for under $40K. On the other hand, investors believe that this is only the beginning of a long bear market.
Cryptocurrency and Tech Stocks are Once Again Being Shunned by Investors
The Nasdaq dropped 1.3 percent to 14,846.46, a fourteen-week lowest for the tech-heavy index due to the bitcoin sell-off. Over the last weeks, there’s been a widespread notion that buyers are abandoning risky assets like cryptocurrency and tech stocks.
The cryptocurrency market has suffered a massive drop that put crypto token prices at multimonth lows.
The news:The cryptocurrency market saw $130 billion wiped off its value in the last 24 hours, per CNBC.
- Major coins — such as bitcoin and ether — all suffered massive drops.
- Bitcoin and ether are off more than 50% from all-time highs, according to CNN.
What’s happening: “The movements in cryptocurrency markets have been correlated to the selling seen in higher risk assets like technology stocks as investors prepare for tighter monetary policy from the U.S.
It has been designed to support decentralized applications (dApps).
The open-source protocol uses a Proof-of-History consensus in conjunction with the underlying Proof-of-Stake consensus mechanism to improve the scalability and speed of its network. It currently trades at $49, down from an all-time high of $260.
SOL, like all major altcoins, has been impacted by the current turmoil in the crypto market. Solana lost long-term support at $92 in April and hit a low of $37 this month before bouncing back to the $43 long-term support line.
SOL is now moving sideways in a narrow range of $45-$55.
While the current phase appears to be one of consolidation, Solana will have to move above the psychological resistance of $65 to ensure a rally. Technically, a breakout above the $59 and eventually $75 is required for a clear market structure shift.
An identical pattern emerged at the beginning of January 2022, with the aggregate cryptocurrency market valuations dropping by another $200B.
Analysts attributed the problem to several variables at the time, such as the discovery of a new variety, civil turmoil in Kazakhstan, and the Federal Reserve adopting a more hawkish approach to battle inflationary fears. The current sell-off implies that investors are losing faith in the Fed’s plan to decrease its balance sheet in tandem with upcoming interest rate hikes.
Russia Considering Prohibiting the use of Cryptocurrency
In yet another blow, Russia’s central bank announced that it is preparing a plan to prohibit the usage and mining of Cryptocurrency.