Tuesday, June 28, 2022

Why Did The Crypto Market Crash

After The Bull Run: Is Another Seismic Bitcoin Crash On The Horizon


2021 saw all-time highs broken throughout the year followed by a series of harsh corrections. Today, as we head towards 2022, its worth asking whether another major Bitcoin crash is on the horizon, or if BTC will enjoy a stronger end to Q4.

Bitcoin is a famously volatile asset, but following a series of good news surrounding major institutional acceptance, it was hoped that more stability would be secured across the cryptocurrency market.

These hopes were dashed in April 2021 as Bitcoin shed more than 50% of its value in the space of little more than a month.

As Visual Capitalist data shows, the correction may have shaken up plenty of 2021s newcomers to the crypto market but the scale of the crash corresponded with the coins history of significant price drops with the current record dip standing at some 86.7% between 2013 and 2016.

As the table above shows, despite its long history of crashes, Bitcoin has still been extremely successful in terms of its impressive rallies and price accumulation.

At present, Bitcoin sits near its all-time high price, but there appears to be little clarity on what the worlds oldest cryptocurrency will do next. Whilst some speculators are expectant of a major bull run, the disappointing performance of BTC in recent weeks has led to others predicting the beginning of a sharp downturn and bear market. With this in mind, lets take a look at the history of Bitcoin to see if we can identify whether a crash may be on the way:

Why Did The Crypto Market Crash Heavy Claims

Fluctuations in crypto assets can usually be considered normal, but the same cannot be said for general market crashes. The general collapse in crypto assets is significantly reducing the crypto market value. If we make a different analogy, crypto assets are like domino stones and they break down en masse, continuing to hit each other when it comes to a quick push. And investors dont have what they were hoping for.

We have compiled the reasons for this collapse in the crypto market for you. Here are the main reasons for the collapse in thecrypto market, according to experts While the crypto market has lost approximately 8 percent of its value, the crypto currencies that make up this market have also experienced a loss in value. The top 20 coins in the crypto currency market decelerated by between 6 percent and 20 percent. As an example of these crypto currencies, Bitcoin, Ethereum and XRP lost 8 percent.

Deciphering the reasons for the depreciation, among them, there is talk that most private crypto currencies may be banned in India, as well as serious bans imposed on behalf of crypto assets in China. In addition, according to analysts, US tax reporting requirements also matter in this downturn. But the main critical reason, according to experts, is the Corona virus.

How Much Have Bitcoin Ethereum And Dogecoin Lost In Value

With Tuesdays losses, bitcoin has slid more than 50% from its all-time high above $64,000 in mid-April. To be sure, bitcoin is still up more than 200% over the past 12 months.

Ethereum has shed nearly 57% from its all time high of $4,356.99 in May while Dogecoin has shed more than 70% since it touched a record of about 73 cents last month, according to CoinGecko.

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Are Cryptos Right For You

First-time investors should proceed with caution. Piling all of your nest egg into something as volatile as cryptocurrencies poses big risks to your retirement, experts say. Wealth managers and finance experts have long been skeptical of these speculative investments for amateur investors due to their extreme swings.

In 2013, bitcoin began trading around $13 and spiked to more than $1,000 by December. In late 2017, the digital token surged to nearly $20,000, before crashing to almost $3,000 the following year. What followed was a dizzying rise to above $64,000 in April 2021.

Dogecoin has seen similar booms and swoons. It has ridden a similar Reddit-driven wave as stocks like GameStop and AMC in recent months, accelerated by a series of tweets by Musk, who was pumping the cryptocurrency.

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Even with the latest declines, the sharp rise in the value of bitcoin earlier this year has some analysts worried about a potential bubble in the cryptocurrency market, with bitcoin’s price at one point more than doubling since the start of 2021.

About 81% of fund managers polled in a recent Bank of America survey in June said bitcoin was still a bubble. Thats up from about 75% of managers who said so in May.

“Cryptocurrency traders, especially individuals, need to know the risks of what they own,” Royal added. “In some cases, the risks could be a complete loss of their investment.

Should You Sell Or Hold Your Crypto Assets

Crypto Crash 2021 : Why did crypto markets crash yesterday ...

The Quint spoke to Industry experts to understand whether investors should sell or hold cryptocurrencies.

Chandra believes that Investors should hold a long term view of the digital assets market. Altcoins and Ethereum will bounce back swiftly. “Amateur investors would be better off staying away from the market. The current volatility would be overwhelming for newbies in the crypto space,”he said.

Meanwhile, Mehta said that holding on to Bitcoin and Ethereum will be a wise option. “Amateur investors should begin buying slowly and steadily through a systematic plan spread over the next couple of years at least,” he added.

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What Is Happening To Bitcoin

Bitcoin, and those invested in it, has been on a rollercoaster ride of late, rising and falling sharply on the back of a number of news stories.

To summarise, these dramatic ups and downs over the past few months:

  • 16 December 2020: Price hits $20,000 per coin for the first time
  • 13 April2021: Value hits a record high of $63,375
  • 22 June 2021: Falls to under $30,000 for the first time in 5 months
  • 2 August2021: Bitcoin rallies to its highest level since May at $40,000
  • 23 August 2021: Price returns to above the $50,000 mark

So what is happening? Well, lots.

Why Is The Whole Crypto Market Crashing

As Bitcoin is the biggest cryptocurrency, its value has a knock on effect on smaller coins.

Alongside the reasons outlined above, Twitters CFO Ned Segal also publicly denounced crypto, which could have affected investor decisions. He said that investing in crypto doesnt make sense right now.

Experts also predict that Bitcoin could continue to plummet.

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Which Crypto Prices Are Down

Bitcoin wasnt the only cryptocurrency to feel the initial effects, with most of the top 10 all experiencing dips in value.

Dogecoin, which was initially set up as a joke in 2012 before seeing its shares skyrocket, has also dropped while Solana has seen its market price rise by more than 8%.

Musks influence cannot be underestimated as, even though the likes of PayPal, Mastercard and have backed cryptos, the Tesla announcement still rocked the market.

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When Was The Last Major Crypto Crash

Why Did The Crypto Market Crash?

In June, the Chinese Government cracked down on considerable crypto mining operations taking place in the Sichuan province and demanded that Chinese banks and payment channels stop supporting decentralised and anonymous crypto transactions.

This saw Bitcoin prices tumble to below $30,000 in a dramatic plummet from its soaring success.

The cryptocurrency has continued to rise and fall as other global administrations and regulators mull legislation to curb increased crypto activity often attributed to laundering and crime.

Following the Chinese states move, countries like South Korea also pledged to tackle the rise in money laundering taking place via cryptocurrency, while the Metropolitan Police announced that it had successfully closed in on a huge UK cryptocurrency money-laundering operation.

July saw the Met seize a cryptocurrency operation valued at £180million in the UKs largest cryptocurrency seizure to date.

In turn, cryptocurrency exchange platforms such as Binance have been feeling the heat across the world as regulators and governments have started to pay close attention to the operations of such platforms in the wake of the global crackdown on crypto.

The result of this saw Bitcoins highest prices sliced in half in June, with the coin struggling to break out of the low to mid $30k price range until it received a welcome boost from Tesla founder Elon Musk in his appearance at major Bitcoin conference in July.

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Bitcoins price fall over the last two weeks has represented a long-awaited pullback from investors testing the strength of support below the higher thresholds for the coin and to stabilise risk incurred by rising inflation and President Joe Biden‘s $1 trillion Infrastructure Bills impact on cryptocurrency trading in the US.

The Infrastructure Bill, signed into law by the US President on Monday 15 November, contains provisions that could see cryptocurrency brokers or exchanges have to declare the names and addresses of their customers alongside cryptocurrency gains and tax requirements on businesses or exchanges receiving more than $10,000 worth of cryptocurrency or digital assets.

This week, however, has also seen further signs of concern in global markets with the Indian Government proposing cryptocurrency regulation legislation which would prohibit all private cryptocurrency holdings.

The Cryptocurrency and Regulation of Official Digital Currency bill drafted by the Indian Government has seen fears of a crypto ban swell in the country, where Bitcoins price dropped in the early hours of Wednesday morning.

Such moves to regulate the cryptocurrency market come several weeks after the Chinese Government reiterated its ban on cryptocurrency mining and crypo-related transactions, which it declared to be officially illegal in September.

Through crypto ETFs, investors can speculate on the future cost of cryptocurrencies without having to actually hold it themselves.

Heres Why Cryptocurrency Crashes On Weekends

  • Investors may trade cryptocurrency outside of the work week, allowing for after-hours price swings.
  • Fluctuations happen on weekends due to less volume, margin trading and other factors, experts say.
  • Weekend drops may have significant effects as regulators weigh long-term plans for digital currency.

Cryptocurrency is known for volatility and some experts say crashes tend to happen on weekends.

“This has been a phenomenon in crypto for several years,” said Stephen McKeon, associate professor of finance at the University of Oregon in Eugene, and partner at Collab+Currency, a cryptocurrency-focused investment fund.

These weekend dips may have significant effects as regulators weigh the future of digital currency, experts say. Here’s why these crashes may be happening.

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New Covid Variant Found In South Africa

Bitcoins price plummet levels previously seen in early October come just weeks after the worlds largest cryptocurrency reached a new record high of $69,000 in value on 10 November.

The cryptocurrency market was down by 7.92% on the last 24 hours as of 12.30pm today, according to Coinbase, with cryptos down as nerves over Covids impact on markets take hold worldwide.

Bitcoins price has fallen by almost 7% at the time of writing on the last 24 hours, with Ethereum down 8.88% on the last 24 horus and Cardano’s price down by almost 10% on the last 24 hours.

Here’s why the crypto market is down today, why Bitcoin price has dropped along with Ethereum, Solana, Cardano, XRP, Shiba Inu coin and Dogecoin – and how much cryptos are down today.

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Why Did the Crypto Market Crash, Is it a Good Time to Invest?

BTCUSD, weekly: When should you take profits in a runaway bull market? Whenever a key Keltner band is reached or exceeded. Image: TradingView.com

If there is a simple takeaway from the above chart, its this:

  • Anytime a crypto market touches or exceeds a Keltner band setting of nine average true ranges beyond a 45-period exponential moving average , you should take some, if not all of your open profits.
  • If the above scenario occurs in a parabolic, runaway bull market, take all of your profits, or risk having them taken away from you. Pro traders are exiting there . They know full well that the potential for more upside is very small.

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Bitcoin Price Collapse Explained

Bitcoin is now down more than $10,000 from the peak it reached on 10 November, with still no solid signs of the price slide stopping.

Speaking to various analysts and experts, we heard their thoughts on what caused this latest price correction and where the cryptocurrency might go from here. Reasons range from the US infrastructure bill, to the liquidation of MtGox assets that account for more than 3 per cent of the entire circulating supply of BTC.

You can read the full story here:

Bullish signal for BTC could result in uptrend resuming towards to new all-time-highs, one expert says

What If Youre Interested In Crypto But Havent Yet Invested

Yangs set it and forget it approach to crypto reflects his philosophy for investing in the traditional stock market, but some experts feel cryptocurrency is too different from traditional investments to draw any historical comparisons. Thats why AShira Nelson of Savvy Girl Money is staying well away.

Nelson primarily invests in low cost index funds because I can see history on that, she says. The newness of cryptocurrency and lack of trackable data make her wary of these crazy swings.

Potential investors looking to buy the dip should understand that fluctuations are par for the course, and be prepared for this kind of volatility going forward. Even if you invest now, with prices relatively low, be prepared for them to fall even more. Again, only put in what youre comfortable with losing after youve covered other financial priorities, like emergency savings and more traditional retirement funds.

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Learning From Bitcoins Cycles

Arguably the most important quality that Bitcoin has in relation to most other cryptocurrencies is its scarcity. When Bitcoins pseudonymous creator, Satoshi Nakamoto, built BTC, he opted to program the asset to undergo a halving event every four years in a move that would continually halve the number of BTC rewarded to miners over time.

These halvings have occurred three times in the past, in 2012, 2016, and most recently in May 2020. Halving events are programmed to occur within BTC continually as the asset reaches its capped circulation of 21 million coins.

As the chart above shows, the scheduled ramping up of Bitcoins scarcity traditionally sparks significant bull runs that can see the coin make significant gains on its value. However, we can also see that the bull run peaks are always followed by heavy crashes.

However, its also worth adding that Bitcoins next halving event, scheduled to arrive in 2024, is likely to trigger another price run that may see the value of the asset climb beyond its 2021 peaks, despite the significant volatility that will inevitably fall in between.

The chart above analyzes Bitcoins stock-to-flow model . In a nutshell, stock-to-flow has emerged as a popular model that looks at how scarcity can generate value. Its the ratio of the current stock of an asset and the flow of new production.

What Are The Prices Of Ethereum Shiba Inu And Cardano Today

WHY DID THE CRYPTO MARKET JUST CRASH!? – Should you buy the dip!? (URGENT)

With cryptocurrencies often moving in tandem with Bitcoin, Ethereum, the cryptocurrency synonymous with the rising crypto trend of NFTs, was trading down by almost 9% on Friday after hitting a new record high of almost $5,000 in early November.

Ethereums price was fluctuating at around $4,050.06 at 12.58pm on Friday down from $4,842.54 at 6am on 9 November.

The hype surrounding popular memecoin Dogecoin had appeared to diminish in value recently as new alt and meme coins take centre stage.

Shiba Inu coin is trading down by roughly 5% on the last 24 hours at approximately $0.000038 as of 1.05pm today after smashing through multiple record highs in late October.

Dogecoin, meanwhile, was trading down by approximately 8.74% on the last 24 hours at $0.202421 on Friday afternoon.

Meanwhile, Cardano prices are fluctuating around $1.54 in an almost 11% fall on the last 24 hours, XRP was down 9.86% at $0.946943 and Solana at $191.05 as of 1.02pm on Friday.

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Cryptocurrency Prices Today: Bitcoin Crashes 9% Down 20% From Record Highs As New Variant Spooks Investors

1 min read.Livemint

  • Ether, the second-largest digital currency, dropped more than 12%, currently trading 9.69% lower at $4,087.
Listen to this article

The new variant of coronavirus, first found in Southern Africa, is roiling global markets, with its impact resounding across markets incuding cryptocurrencies.

The worlds largest cryptocurrency fell as much as 9% to $53,552 on Friday. It is currently trading lower by 7.30% at $54,695 at the time of publishing this report

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Ether, the second-largest digital currency, dropped more than 12%, currently trading 9.69% lower at $4,087. Other coins such as Dogecoin dropped 8.3% while Shiba Inu is down nearly 5%

Bitcoin tumbled 20% from the record high it notched earlier this month. The world’s largest cryptocurrency has been under pressure since reaching a record of almost $69,000 earlier this month on enthusiasm over the first US exchange-traded fund linked to futures on the digital asset. It is currently sitting near its 100-day moving average of $53,940, which served as support during its late-September pullback.

A new variant identified in southern Africa spurred liquidations across global markets, with European stocks falling the most since July and US equity benchmarks also lower in early trading. Bitcoin wasnt spared from the carnage despite being seen by many crypto enthusiasts as a hedge against financial-market turmoil.

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