Tuesday, June 28, 2022

Is Crypto Going To Crash

A Trend Among All Cryptocurrencies

Crypto crash – Why the crypto market is going down (and how to profit)

Yes, we are talking about Bitcoin and currencies like Luna because those are among the most popular and those with higher prices, at least until the recent crash. However, altcoins , like Solana and Cardano, also experienced a drop of around 12%, which is not something to overlook.

Even the so-called memecoins, which were initially intended as internet jokes rather than cryptocurrencies or serious blockchain projects, experienced the effects of the crash. An example is Shiba Inu, which experienced a loss of 16% in 24 hours.

Why Did Bitcoin Crash

Investors appear to be moving away from cryptocurrency and towards less risky investments in the face of global inflation.

Crypto has been hurt further by a sharp drop in US stock prices.

Analysts at crypto exchange Bitfinex said: Spiralling levels of inflation have left global financial markets staring into the abyss as the prospect of a global recession looms large.

This is leaving all assets that have benefited from more than a decade of accommodative monetary policy from central banks vulnerable to a correction as interest rates rise.

Morgan Stanley says the interest of institutional investors in cryptocurrency makes it more sensitive to changing interest rates, and makes it behave more like the traditional stock market.

Retail investors are no longer the dominant crypto trader. The largest proportion of daily crypto trading volumes is from crypto institutions, much of which comes from them trading with each other. For example exchanges, custodians, and crypto funds, the company wrote in a note.

Retail traders were dominant around four years ago, when Bitcoin traded below $10k. We think the increased involvement of institutions, which are sensitive to availability of capital and therefore interest rates, has contributed in part to the high correlation between Bitcoin and equities.

More from Cryptocurrency

Crypto Market Moves To Watch In June

In June, Ethereum will take the next major step in the cryptos transition to a more energy-friendly proof of stake verification system.

The Ethereum network has been running two parallel blockchains since April, its legacy chain that operates using proof of work and a test chain that operates via proof of stake.

Ethereum plans to combine the two parallel chains together in August in an update it is calling the merge. In June, Ethereum plans to update its test network Ropsten in a key trial run for the merge.

The key risk for cryptocurrency investors in coming weeks may be the possibility of a softening U.S. economy.

On the inflation front, cryptocurrency investors should keep an eye on the Labor Departments U.S. Consumer Price Index report for the month of May, which will be released on June 10. The CPI data will update the market on how well the Feds initial interest rate hikes are working to ease inflation.

The June Fed meeting on June 15 could also be a major crypto market mover. Investors are anticipating another 50 bps interest rate hike, but any updates from Fed Chair Jerome Powell during his press conference on the health of the U.S. economy could be an important market catalyst.

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A Matter Of Perspective

The series of discoveries of cross-tenant vulnerabilities in Azure can even be seen as a good thing, according to Luttwak. Microsoft encourages research of this kind, he said, and offers up to a $60,000 bounty for the discovery of Azure bugs.

The fact that there are vulnerabilities the entire platform is not secure, Luttwak said. I don’t think that you can claim that Azure is more or less secure than the others. It’s a very good question , but I don’t think anyone has the data to say that.

The vulnerabilities that have been surfacing in Azure would appear to be more of an issue of Microsoft being down on its luck and being the target of security research, said Beaver, who founded his consultancy Principle Logic LLC in 2001 and is on the faculty at the prominent research firm IANS.

These things can happen to any business at any time, he said. They still have human beings running the show. And negative events are going to occur.

In its statement to Protocol, Microsoft said that its security teams work around the clock to identify and mitigate potential security issues. We also work with the security research community through coordinated vulnerability disclosures to ensure potential security issues are identified and mitigated before they are disclosed publicly.

Serious cross-tenant vulnerabilities are predominantly showing up in Azure.GIF: Wiz

Bitcoin Is Among The Most Popular Cryptocurrencies And Is Used By People All Over The World

Investment Losses in the Crypto Crash

The cryptocurrency market is currently experiencing a crash of epic proportions. The price of bitcoin, which was once valued at over $19,000, has fallen back down to around $3,400. This is despite the fact that the market has been steadily rising in recent months.

So what is causing this sudden drop in the value of crypto, and when can we expect it to recover?

The answer lies in the fact that cryptocurrencies are inherently volatile. The prices of these digital assets are extremely sensitive to news, rumors and changes in regulation. In short: if you don’t know what’s going on behind the scenes with crypto regulation, you could be facing a potential loss of thousands or even millions of dollars.

In the past few months there have been several developments that have led many people to believe that cryptocurrencies were on an upward trajectory toward recovery from their early 2018 slump. However, one unexpected event can change everything very quickly and if you’re not prepared for it when it happens then your entire portfolio could be wiped out overnight!

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Bitcoin May Not Be The Best Hedge Against Inflation

The crypto market has been moving in sync with the stock market for the past few months. The correlation between Bitcoin and the S& P 500 hit a high of 17 months in March 2022, demonstrating that crypto and stock markets are moving in the same direction.

Bitcoin is often seen as a good hedge against inflation. That means inflation doesn’t affect the top cryptocurrency. It might not be true every time at least, that’s what the market witnessed this week. High inflation and tighter monetary policy affected crypto investors as well, resulting in the collapse of the market. These developments show that crypto has a bigger market now and is becoming more mainstream.

Signals A Crypto Crash May Be Coming According To Experts

Crypto crashes can be identified using macro indicators, technical analysis and on-chain analytics. Here is how to use them.

Cryptocurrency markets are notoriously volatile. Bitcoin , the largest cryptocurrency with a market cap of $550 billion, is down 47% from its all-time high of $69,000 achieved only six months ago, as of this writing. Perhaps you’re caught by surprise when the cryptocurrency market goes down. But for professional traders and market analysts, crashes are often foreshadowed by telltale signs and patterns.

Depending on their disciplinary background and methodological conviction, traders and market analysts can gauge the market sentiment in three ways:

Each approach draws on different data, but all can be used to equal effect when predicting market movements.

Here are the favorite tools of traders and analysts interviewed by CoinDesk and how they use them to look for bearish signs in the cryptocurrency markets, spearheaded by bitcoins price movements.

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How Does Terrausd Work

TerraUSD is an entirely different beast than Tether or USD Coin. Its an algorithmic stablecoin, backed by nothing more than the magic of computer code.

With an algorithmic stablecoin, a computer program maintains the cryptos supply. Once you understand that theres nothing but code backing up the likes of UST, you begin to see how things could have gone south so quickly.

So lets dive into the whole mess of TerraUSD, which plunged as low as $0.23 this week, far below its $1 peg. Crypto experts say the mechanisms behind TerraUSD were fundamentally flawed from the get-go.

In the TerraUSD system, a special crypto token called LUNA is used to help UST hold its 1-to-1 peg value with the U.S. dollar.

This whole system is entirely broken because it rests on a speculative assetLUNAto be the collateral, says Colin Aulds, founder of cryptocurrency storage company Privacy Pros. The problem is that LUNA was created for the purpose of being collateral simply because the Terra ecosystem needed collateral.

There was little that was stable, so to speak, behind this stablecoin other than its programmatic language.

Machine Learning Helps Spark Real

CRYPTO CRASH: Bitcoin Price Plummets, Is bad Government Regulations To Blame?

Across the business spectrum, there are a few key factors fueling the rise of real-time data processing and analytics, and the rise of AI and machine learning is an important one. Companies want to use machine-learning systems that improve as theyre exposed to fresh information in the hopes of making smarter decisions and optimizing existing efforts in milliseconds.

While traditional business intelligence analytics efforts dont need real-time data or processing, real time and machine learning really go hand-in-hand, said Gaetan Castelein, vice president of Marketing at Tecton, who explained that real-time data and machine-learning trends are converging, feeding off one another.

Consider a bank conducting millions of transactions each hour, for example. Whether or not the model decides to approve the transaction could be dependent on as many as 2,000 individual pieces of information: some relatively static, such as a zip code, and some brand new, such as a numerical amount of a cash transfer. However, data systems like Tectons can optimize for the most efficient approach to managing that process by separating the data pieces that are fresh from the ones that remain the same.

Because you need to respond to the transaction really quickly, but you dont want to be computing that stuff in real time, Del Balso said. Its OK if some of the signals are a bit delayed, he said, adding, That becomes a performance tradeoff.

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The Crypto Crash Could Be The Start Of Bigger Things To Come

The crypto crash could be the start of something big. If you don’t know what’s going on with crypto currencies, you probably don’t feel that they can be trusted at the moment. But when you read this article, you’ll find out that the market can recover. This is because there are a lot of reasons why cryptocurrencies are falling. And it’s likely that there are reasons why the market might recover in the near future.

First Spot Bitcoin Etf

A big development crypto investors are on the lookout for in 2022 is approval of the first spot bitcoin exchange-traded fund in the United States.

Although the Securities and Exchange Commission greenlighted the launch of ProShares’Bitcoin Strategy ETF this year, the product tracks bitcoin futures contracts rather than giving investors direct exposure to the cryptocurrency itself.

Futures are financial derivatives that oblige an investor to buy or sell an asset at a later date and for an agreed-upon price. By tracking futures prices instead of bitcoin itself, experts say, ProShares’ ETF could be too risky for novice traders, many of whom are invested in crypto.

“The Bitcoin Futures ETF that launched this year has been widely regarded as not very retail-friendly given the high costs involved of rolling over contracts which amounts to around 5-10%,” said Vijay Ayyar, vice president of corporate development and global expansion at crypto exchange Luno.

“Increasing pressure/evidence points to a Bitcoin Spot ETF being approved in 2022 mainly because the market is now large and mature enough to support one.”

Grayscale Investments has filed to convert its bitcoin trust, which is the world’s biggest bitcoin fund, into a spot ETF. And there are plenty of other bitcoin ETF applications waiting in the wings.

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Why Are Cryptocurrencies So Volatile

Cryptocurrencies are virtual assets, the majority of which are not backed by any physical asset or government assurance. This means that there is no consistently valuable asset that cryptocurrencies are supported by. The exception to this rule is stablecoins, coins that are often backed by a traditional tender or physical asset. But most cryptos do not fall under this category.

So, if cryptocurrencies are so volatile, what factors are they affected by?

Understanding The Bottom Through On

Crypto Crash

As the majority of cryptocurrencies use public blockchains to verify and record transactions, the data is available on-chain for everyone to see. This has given rise to on-chain analytics, which looks at transaction data and crypto wallet balances to understand market conditions.

On-chain analysis can tell us if bitcoin were to fall and how low it may go.

Whalemap, an on-chain analytics tool, popularized a metric called realized price by cohort. The metric calculates the average price that bitcoins were acquired by different types of wallets on the blockchain, such as whales who hold between 10 and 100 BTC.

Tracking those players realized price gives great accurate indications of macro supports, Whalemap told CoinDesk. The realized price for the 10-100 BTC wallet cohort has identified every generational bottom for bitcoin so far, as indicated in the chart shared with CoinDesk.

The band currently resides between $27,000 and $25,000, as per the data. If bitcoins price was to start falling, this should serve as a long-term support for BTC that we can be historically confident in, Whalemap said.

But thats a big if theres no definite way to tell after all. EZCharts, a pseudonymous trader quoted above with a bearish take, told CoinDesk that some people are bullish here. It wouldnt be a market unless some were bullish and some were bearish.

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Bearish Signs In Technical Analysis

Technical analysis the study of candlestick price charts is a major toolbox for traders.

Josh Olszewicz, head of research at digital asset investment firm Valkyrie Investments, told CoinDesk that he uses Bollinger Bands, a popular price volatility gauge, to understand where bitcoin is headed. Things seem bearish for the leading cryptocurrency at the moment judging by this tool, he said.

Bollinger Bands expand or contract based on two standard deviations a mathematical calculation from the 20-period moving average of the bitcoin price. The 20-period moving average often refers to the average price over the last 20-candle period.

The chart below shows us three things, said Olszewicz:

  • Volatility has rarely declined to this level since 2011.
  • Volatility does not usually fall much further before a volatility expansion.
  • Whenever volatility has fallen this much, it has always exploded soon enough.

Olszewicz said that based on the weekly Bollinger Bands, the market is bearish as bitcoin continues to close below the 20-week moving average of $42,700 at the time of writing.

Oher TA tools are favored by crypto traders, many of whom are independent day traders.

Cyborg, another pseudonymous crypto trader, said he believes the majority of nukes come from two sources: money flowing out of bitcoin and into altcoins, and separately, derivatives getting caught offside.

Crypto Experiences A Broad Collapse

1-year change in the value of cryptocurrencies

Prices are through 6 p.m. Eastern time on May 12.

How long cryptos collapse might last is unclear. Cryptocurrency prices have typically rebounded from major losses, though in some cases it took several years to reach new heights.

Its hard to say, Is this Lehman Brothers? said Charles Cascarilla, a founder of the blockchain company Paxos, referring to the financial services firm that went bankrupt at the start of the 2008 financial crisis. Were going to need some more time to figure it out. You cant respond at this type of speed.

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Is The Crypto Market Now Moving More Like The Stock Market

The cryptocurrency market, like the stock market, has been seeing declines for months. It peaked in November, and with aggressive liquidity tightening signals by the Fed, all asset markets have since seen a correction.

Sylvia Jablonski, chief executive and chief investment officer of Defiance ETFs, said the correlation with the Nasdaq is at 0.82, up from historical levels of below 0.5 . In similar terms, both traditional and stock markets are moving in similar directions more than ever, so there is a spillover effect in investor sentiment.

Experts are observing a stronger correlation between cryptocurrency and tech stocks, which were among the hardest-hit stocks in the recent market slump.

$2 Trillion Crypto Crash Warning: Sudden Shock Tanks The Price Of Bitcoin Ethereum Bnb Luna Xrp Solana Cardano Avalanche And Dogecoin

CRYPTO CRASH! – What Is Going On?

The latest bitcoin and crypto crashsending the market back under $2 trillionhas seen the bitcoin price drop 5% over the last 24 hours, adding to earlier losses, while ethereum and its biggest rivals BNB, solana, cardano and avalanche are leading the market lower, all down between 5% and 10%.

Ripple’s XRP and Terra’s luna are down 5% and 7% respectively, while the meme-based dogecoin, which had soared this week following Tesla billionaire and dogecoin supporter Elon Musk buying a major stake in Twitter and joining its board, has crashed 13%.

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The bitcoin and crypto market has dropped below $2 trillion as ethereum, BNB, XRP, luna, cardano, … solana, avalanche and dogecoin all plummet.

The bitcoin and crypto crash comes after Federal Reserve meeting minutes revealed the officials agreed to begin reducing the bank’s yawning balance sheet by $95 billion a month, likely beginning in May. The plans hit stock markets, with technology shares leading a retreat and resulting in the Nasdaq 100’s worst two-day loss in nearly a month.

“While bitcoin and the wider cryptocurrency market has dipped today the trend of range-bound trading appears to remain in place as on-chain data shows that overall buying activity remains positive.”

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