HomeBusinessCrypto Crash Reason (6/13): Why is crypto crashing today? Experts speak

Crypto Crash Reason (6/13): Why is crypto crashing today? Experts speak

Why is crypto crashing today? Cryptocurrency markets crashed to a new low this year today. Global market cap fell to $1.02 trillion from $1.10 trillion recorded yesterday. The global cryptocurrency market capitalization has fallen by around $1 trillion this year, while nearly all major coins are now worth half or even less than their all-time highs.

The immediate trigger for the crypto crash appears to be a sell-off by investors amid heightened inflation fears. Investors also continue to steer clear of riskier assets, which is also reflected in equity markets.

Bitcoin, the largest and most popular cryptocurrency, fell to $25,586 while almost all altcoins, starting with Ethereum, have been bleeding prices since the weekend.

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Ethereum has fallen to its lowest level in over 14 months, currently trading at around $1350 at the time of writing. Solana has fallen nearly 30% and is hovering around the $29 mark.

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Experts say falling crypto prices indicate a drop in investors’ risk appetite. They are clearly wary of risky assets. With all its uncertainties and volatilities, crypto is considered to be one of the most volatile instruments for investment purposes.

“The crypto market has been under pressure from the Federal Reserve, raising interest rates to fight inflation over the past few months. Bitcoin, Ethereum and most cryptocurrencies suffered losses over the weekend after a broad selloff following data showing US inflation hit a 40-year high,” said Edul Patel, co. -founder and CEO of crypto investment platform Mudrex.

“While investors seem to have panicked, the number of crypto liquidations has been high since Friday. Bitcoin and Ethereum have fallen 7% each and are currently trading at their lows of $25,000 and $1,300. The downtrend could likely continue in the coming days,” he added.

While altcoins have historically underperformed Bitcoin, this time around they are under additional pressure from potential regulatory hurdles. A CoinDesk report quoted an expert as saying that only a small number of altcoins are likely to survive such market moves.

Shivam Thakral, CEO of crypto exchange BuyUcoin, said rising food, gas and energy prices are putting huge pressure on the crypto market as Bitcoin and Ether have recorded losses at double digits in the last 24 hours.

“After the consumer price index recorded the highest inflation since 1981, financial markets around the world experienced a sharp decline,” said Thakral.

“The market is expected to remain choppy in the coming weeks and countries around the world continue to report high inflation numbers. The current decline in crypto prices allows investors to buy crypto at 2021 prices and we we expect seasoned investors to take advantage of the decline,” he added.

According to Darshan Bathija, CEO of crypto exchange Vauld, most investors fear that unless inflation numbers start to come down soon, the US Fed may have to tighten the reins by raising interest rates. interest at a faster rate than expected.

Bitcoin in oversold zone

“Bitcoin faced another major correction, falling to nearly $25,000, the lowest in over 5 months. Interestingly, the Dollar Index (DXY) is also at its 6-month high, gaining 2 % in the past day alone, driving equity and crypto markets lower On the daily timeframe, BTC trend broke below the long triangle pattern Immediate and key support is expected at 24,000 $.RSI fell below 30 as Bitcoin entered the oversold zone,” WazirX Trade Desk analysts shared in a note.

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Meanwhile, Ethereum has corrected over 20% over the past week, while Ethereum against Bitcoin has fallen over 11% over the same period as Bitcoin’s dominance topped 48% for the first time in almost a year.

“The daily chart for ETH-BTC broke below the descending channel pattern and fell below its previous support at 0.055. Next support for ETH-BTC is expected at the 0.038 level,” they said.

(The article has been updated for some grammatical and factual errors)

(Cryptos and other virtual digital assets are unregulated in India. They are considered extremely risky for investment. Please consult your financial advisor before making any investment decision)

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