The million dollar question is what is happening in the crypto world to see the sharp declines experienced by some of the digital currencies. For many, these have to do with a “purge” that will serve to discern the good deals from the bad, even leading to the disappearance of some of the weakest digital currencies. Others prefer to focus on the concentration of negative events that this market accumulates, such as the tightening of financial conditions with increases in interest rates, which are penalizing risk assets in general.
Added to this is the fact that Coinbase, the main cryptocurrency platform, announced this week net losses of 430 million dollars, well above the losses of 47 million anticipated by analysts. Revenue, most of which comes from commercial fees, fell 35% year-over-year to $1.2 billion, below analysts’ expectations of $1.5 billion. See: Coinbase plummets on Wall Street after large losses recorded
Whatever the cause, the truth is that the trigger for these strong movements has been the explosion of the business set up by Terra and its two USD crypto assets Terra is a stablecoin destined to trade at par with the dollar – which after losing more than 90 % in a day trades below it –and Luna who is caught in the crossfire of Terra. The entire market is experiencing great volatility in recent days and especially on Wednesday when Luna fell below the dollar when trading at 0.83 dollars (0.78 euros), while bitcoin and ethereum fell to 29,350 and 2,129 dollars (27,811 and 2,017 euros), respectively.
Bitcoin bearish target towards $12,800
A crash that has put confidence in stable currencies in check…. … and about the main cryptocurrencies. Ramón Bermejo, market strategist, this week monitored the loss of “the relevant support levels at USD 30,016.82 and USD 28,824.32, with which the critical point of the great figure of double maximum with a bearish trap has been violated, being able to estimate a bearish objective towards 12,872.93 USD, this supposes an additional risk of a fall of 53.34%. See: Bitcoin loses the critical point of the great figure of double maximum-
A penalty that has also affected Ethereum, whose graph shows a complicated situation. The crypto is “testing the critical support zone where a large double top figure would begin to be validated, being able to estimate a bearish target towards 661.014 USD, it would be a distance of 64.96% from the current price”
A fall What is here to stay?
“The concern now for crypto investors is when the slide will end in a heady environment where investment markets are struggling to decide where comfortable levels are in the wake of planned interest rate hikes to quell rising inflation. throughout the western world,” said eToro’s senior crypto asset analyst Simon Peters.
In this way, Peters explains that the market moves closer to other large risk assets, such as technology stocks. The analyst has pointed out that the volatility and poor performance of the market tend to correct itself over time, so “the key now is for investors to make sure they are satisfied with their investment cases, and are prepared to stay the course in the face of increased volatility. See more…
Belén San José, CEO of Pecunia256 recognizes that “It is true that in the short term we are seeing moments that we would prefer to ignore, but in the long term the fundamentals support the technological projects that make up the digital market”, she points out, “we cannot get carried away for the short term.” See Has a downtrend started in cryptocurrencies?
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