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Crypto: The market has fallen again!

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Fri August 19, 2022 ▪ 6:00 p.m. ▪ 4 min reading – by Mikaia ANDRIAMAHAZOARIMANANA

Crypto market crises are just the tip of the iceberg. But when they touch the transmitters of stablecoins, institutional investors, individuals and major cryptocurrency exchanges, it’s total panic. Recently, analysts have argued that the recently regained semblance of a recovery has lost its appeal. Because we have again entered a new crisis.

Fall of the cryptocurrency market, and again!

We will remember this for a long time bear market which has affected so many players in the crypto ecosystem. Penalized by the leverage effect, both bitcoin and ether have fallen to minus 70% of their value at the end of 2021. Result: the sector has seen its size drop to $1 billion. Whereas it was 3 billion dollars before this crisis.

However, there was hope when major cryptocurrencies posted a rally recently. Bitcoin, still in first place in CoinGecko’s rankings by market capitalization, was no longer trading at $19,000. The floor price of $23,000 has been reached.

screenshot evolution prix bitcoin

Bitcoin (BTC) price evolution in 7 days – Source: CoinGecko

But it was only a mirage, it seems. As of this writing, CoinGecko is showing a price of $21,445.97, down 9%. Ethereum also followed it in this downtrend.

In the past 24 hours, the market has liquidated the equivalent of $550 million in cryptocurrencies. Its overall capitalization was down to just $1.09 trillion, down 7%.

What are the reasons ?

Undoubtedly the announcement of further interest rate hikes by the FED against a background of inflation! To say that the revision of these same rates last June allowed bitcoin to reach the 22,520 dollar mark again, momentarily. A meeting of the Federal Open Market Committee (FOMC) accompanied this decision.

crypto 17

Source: Trading View

Recently, FOMC members agreed to raise interest rates yet again. This is in order to control inflation. This time around, there will be no inflation rate subsidy due to lack of evidence on mitigating “ inflationary pressures “.

Here is an excerpt from the FOMC report:

Members agreed that, in assessing the appropriate monetary policy stance, they would continue to monitor the implications of incoming information for the economic outlook and stand ready to adjust the monetary policy stance; if necessary, if risks that could hinder the achievement of the Committee’s objectives emerge. »

Hence this panic situation that the crypto market is currently experiencing. But we must not forget that this remains temporary. Indeed, in June, a correction had taken place and that had put an end to investors’ nightmares.

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Mikaia ANDRIAMAHAZOARIMANANA avatar

Mikaia ANDRIAMAHAZOARIMANANA

The blockchain and crypto revolution is underway! And the day when the impacts will be felt on the most vulnerable economy of this World, against all hope, I will say that I had something to do with it

Source: www.cointribune.com

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