Cryptocurrency markets have been crashing. The majority of top tokens have slid significantly from their positions in the last few hours and this has become a cause of concern for investors as well as other stakeholders.
In the past twenty-four hours, CoinMarketCap data showed that as of 7:50 AM IST, the global market capitalization of cryptocurrencies has slid by 9.83 per cent over the previous 24 hours, to $1.40 trillion. Bitcoin is trading at $31,008 and is down 8.54 percent after hitting support levels. Its all-time high was near $69,000. The cryptocurrency dipped below $30,000 in the early hours of Tuesday but has since recovered.
ETH, SOL, and ADA also fall
Even Ethereum, the second-largest cryptocurrency by market cap exhibited a significant downward trend and is currently trading at $2,317 after falling 7.06 percent.
The ADA token showed a whopping 14.17 per cent downtrend. Solana's SOL token has also taken a hit and was down by 14.77 per cent.
Why are crypto markets falling?
Shivam Thakral, CEO, BuyUcoin told Business Today about the crypto markets crash, “This is the first time since July 2021 that Bitcoin has traded below the $30,000 mark and is down by almost 56 per cent from its peak in November last year.” Listing reasons for the crash, he said, “The global financial markets are battered by rising inflation, growing Russia-Ukraine tension, and a highly volatile situation in Sri Lanka. The Indian rupee closed at a record low which is expected to make imports costlier and will have a significant impact on the financial markets. The above factors are putting tremendous pressure on the crypto market as well and we are witnessing a large sell-off by the investors to park the cash for better times.”
Sharat Chandra, crypto expert and Vice President of Research and Strategy at EarthID told Business Today that the negative sentiment is prevalent not just in the crypto markets but also across equity and bond markets. He said, "Though the markets have fallen across the board, Bitcoin and crypto-assets, in general, have borne the maximum brunt of broader market sell-off sentiment.”
He also told Business Today that Bitcoin might even fall below $30,000. He said, “Bitcoin has lost close to 50 per cent of its value since its November highs. Bitcoin miners are selling off. Net miner flows are in the negative range, and exchange supply is dwindling. Chainalysis data reveals that private wallets account for 40 per cent of exchange Bitcoin inflows which translates into increased sell-pressure. The overall bearish sentiment might drive Bitcoin prices below $30K.”
Talking about what investors and other stakeholders should expect, he said, “More pain lies ahead for crypto markets, but this will eventually be a great buying opportunity for investors who hold a long-term view of the markets because the long-term fundamentals of Bitcoin are in place.”
He further added, "At an all-time high of 0.8 per cent, BTC USD equity co-relation is a positive co-relation and would soothe fears of crypto investors."
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