Bitcoin and other all cryptocurrencies are experiencing a major downfall today, as investors are worried about inflationary pressures and a new systemic threat to the crypto markets. Inflation has reached decades high in the major countries, and the central banks are trying to control it by raising the interest rates. On the other hand, sensing more volatility in the markets due to high inflation, investors are going away from the markets, which is leading to a massive sell-off. The market capitalization of crypto has plunged to $1 trillion recently, which is a sharp slip for the asset. About US$200 billion has been taken away from the market since the end of last trading week. In addition to that, traders are worried about the crypto lending service Celsius which is pausing withdrawals during this extremely volatile market situation.
Crypto fall - quotation
Today, Bitcoin has dropped below $21,000 in Asia, and later bounced back marginally. It is trading at its lowest range since late 2020. Ethereum, another popular crypto has fallen to $1155, at some point, available data on CoinMarketCap stated. Considering the market volatility and crash, crypto exchange Binance has recently stopped withdrawals for more than 3 hours. So, investors should remember that crypto is a high-risk asset and should invest wisely, analyzing the market conditions.
However, giving a view on the overall market, Nirmal Ranga, head of trading and technical analysis at crypto exchange ZebPay told CNBC, "Everything is on fire right now, be it the equities, be it the crypto assets or anything. What you're seeing in the market is fear, uncertainty, and doubt. Technically, markets look oversold and there has to be some floor that we're going to hit in bitcoin in the coming future."
Commenting on the situation, in a recent statement Cryptowire mentioned, "Cryptocurrencies pared some of its losses on short-covering amid speculation that the fall in digital assets may have been overdone given the underlying fundamentals of various projects Bitcoin clawed back some of its losses from an intra-day low of $21000 to trade at around $22500."
"The slowdown in the rout was also supported by a rebound in Us Stock furthers, after major stock indices sold off with heavy losses to hit new 2021 lows on Monday on fears of the US economy tipping over into a recession. Investors' bets for a 75 bps Federal Reserve rate hike are climbing through yields on short-term US treasuries reversed their gains over longer-dated debt, easing fears of an imminent recession," Cryptowire added.