Stockbrokers in panic mode: Is the next crypto winter imminent after the price crash?

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The time of crypto euphoria is over for the time being: The sell-off of Bitcoin and Co. continues. Cryptocurrency prices continued to fall over the weekend. The most important and best-known cryptocurrency, Bitcoin, lost massively within a few days and traded at around $33,700 on Monday afternoon the lowest value since July 2021. Since reaching the previous record high in November last year ($68,744), the digital currency has lost half of its value.  You may learn more about bitcoin trading by using trading software like https://www.chesworkshop.org/trading-robots/.

Price setbacks are not uncommon in the world of Bitcoin and Co. hardly any asset class is considered susceptible to fluctuations as cryptocurrencies. Time and again, news, for example, about government action against cryptocurrencies or tweets from Tesla boss Elon Musk, is moving prices. Just a few weeks ago, the entire crypto market surprisingly slumped. Before the crash in early January, Bitcoin was still trading at around $46,000. With the recent slump, it and other cryptocurrencies continue their recent poor performance.

There is significant uncertainty in the crypto market; crypto investors are in panic mode. At the beginning of January, the US Federal Reserve announced that it would exit its loose monetary policy faster than planned. Rising interest rates tend to hurt speculative assets like bitcoin, which drain liquidity from the market.

“Investors are fleeing from their investments in almost panic.” Bargain hunters are also holding back. As a result, the situation is tense, both fundamentally and technically.

Bitcoin has broken several psychologically and technically essential marks. The 40,000 mark was the starting point for last year’s Bitcoin rally, culminating in the previous record high. Here, many investors also place a stop-loss order to limit crypto losses. The $37,000 mark is also considered essential.

Bitcoin price: soon at 30,000 dollars?

Crypto experts like Emden, therefore, consider a further drop in the price to $30,000 to be a thoroughly realistic scenario. “Many investors are still faced with the difficult decision to settle their losses or sell the remaining book profits at the last second,” says Emden. Such forecasts bring back memories of a dark period in the still young crypto era: in 2018, the Bitcoin price slipped from around $19,000 to under $10,000. He started a brilliant rally after the Corona crash. No one can say whether a second, long crypto winter is starting.

On the other hand, cryptocurrencies have now established themselves in the financial world’s mainstream. Large financial institutions attach importance to them. Second-tier digital currencies, such as the Ripple coin XRP, are used there. Moreover, the low-threshold trading offers from smartphone brokers make investing in cryptocurrencies more accessible than ever for the masses. However, it increases the risk of exaggeration.

Individual cryptocurrencies have performed differently since mid-November when Bitcoin hit its all-time high. The fun cyber currencies Dogecoin (DOGE) and Shiba Inu (SHIB) have lost significantly more than serious cryptocurrencies (minus 60 and 77 per cent, respectively).

The up-and-coming crypto stars Solana (SOL) and Cardano (Ada) have also lost more in value than Bitcoin, for example, since mid-November (minus 62 and minus 56 per cent, respectively). Nevertheless, both coins are now prevalent among investors and have been among the top ten cryptocurrencies by market capitalization. Furthermore, new data from social trading platform eToro shows that Cardano coin Ada was the most popular crypto asset of the past year.

Despite the current weakness of Solana (SOL) and Cardano (Ada), the year-on-year return is significantly outperforming that of Bitcoin and Ether, the second-largest cryptocurrency. For example, Solana (SOL) has posted a plus of 2725 per cent since the beginning of 2021 Cardano (Ada) of 197. It is contrasted with Ether with a price increase of 99.8 per cent and Bitcoin with 10.6 per cent.

How often has it been proclaimed: the turnaround in interest rates. And maybe something will come up this time, too, like Omicron.  

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