Bitcoin collapses again and drags the cryptocurrency market

The price of bitcoin opened the week with a historic collapse. The cryptocurrency crashed below $24,000 and panic grips the entire crypto ecosystem. After trading around $30,000 for a week, bitcoin finally bled out in a few hours and was off more than 20 percent.

At the close of this note, the price of the largest cryptocurrency in the world is $23,555.

Unsurprisingly, the bitcoin crash dragged the rest of the market into a steep decline. While the vast majority of major digital assets posted double-digit corrections, the market wiped out more than $100 billion of its total capitalization in just a few hours.

In this way, the size of the crypto market is less than a billion dollars, a level that has not been reached since February 2021.

Analysts said that the crash of this Black Monday occurred when the actions of world stock markets suffered strong liquidations, such as in the stock markets of Japan, which closed down 3% on Monday, while Wall Street opened 2.3%. down.

On the other hand, new data from the cryptocurrency research and investment company Coin Shares showed that investors last week withdrew $102 million from digital asset investment funds.

Among funds, bitcoin-backed funds suffered the most, with $57 million withdrawn last week. At the same time, funds backed by ethereum recorded outflows of 40.7 million dollars.

CoinShares further stated that “what has pushed bitcoin into a ‘crypto winter’ over the past six months can largely be explained as a direct result of increasingly harsh rhetoric from the cryptocurrency.” Federal Reserve of the United States”.

After the massive fall of the last hours, the panorama is extremely discouraging. Analysts seem resigned to a quick recovery, with all agreeing that a period of negative trading conditions and ongoing market difficulties is upon us.

For example, during the last hours many exchanges have slowed down their activity to avoid extreme liquidations in a few hours, and the action does nothing but encourage panic within the ecosystem and encourage many investors to withdraw their funds.

The great counterweight of the market during the last few days was the new inflationary data in the United States. While the consumer’s price index (IPC) has just reached 8.6% per year -reinforcing its current level as the highest in the last 40 years- all markets are going through a period of uncertainty.

The Federal Committee on Open Markets (FOMC) of the Federal Reserve (Fed) will meet next Wednesday to determine how its monetary policy will be in the coming months to try to curb inflation.

In the coming days it will be interesting to see how the market behaves, and what stimuli it responds to. The whales and the big companies with strong stakes in the ecosystem will surely be center stage.

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