The crypto market capitalization has continued to crash, now sitting at $1.04 trillion, a decrease of over 8% in the last 24 hours. Almost every principal cryptocurrency was in the red, with prices for many dropping by more than 11% and establishing new lows in the previous 24 hours.
The dominance of the top currencies has decreased by nearly 0.5 percent to 47.20 percent of the overall crypto market. Bitcoin’s price has tumbled by a staggering 17.02% over the past week.
At the time of writing, Ethereum is trading at roughly $1350, a drop of more than 14 months. Solana has fallen by almost 30% and is hovering around the $29 mark.
According to experts, the cryptocurrency’s price drop suggests a declining risk appetite among investors. They are very cautious of risky investments. It is one of the most volatile investment due to its unpredictability and volatility.
Meanwhile, the overall currency market capitalization increased by 31.35 percent to $94.56 billion in the last 24 hours, signifying investors’ substantial sell-off of digital assets. DeFi‘s market share volume in crypto was $7.76 billion, 8.2% of all crypto trading volume. The stable coin market had a value of $82.21 billion, 86.94% of the entire cryptocurrency market’s 24-hour turnover.
Why the crypto market is falling
Bitcoin is trading at $25,762.63 as of writing, down from its all-time high of nearly $68,000. Central banks’ interest rates have been hiked, as a result of which cryptocurrency trading has decreased, and their values have fallen. Consider this: Bitcoin’s year-to-date return is down 40%, whereas Ethereum‘s is down 50%.
Here’s what experts have to say about the cause of the market drop
“The crypto market has been under pressure from the Federal Reserve, hiking the interest rates to combat inflation over the past few months. Bitcoin, Ethereum, and most currencies suffered losses over the weekend after a broad sell-off following the data showing US inflation hitting a 40-year high,” said Edul Patel, Co-Founder and CEO of the crypto investment platform Murex.
Amit Gupta, founder and CEO of Fintrekk Capital believes that the decline in cryptocurrency markets is a worldwide occurrence. “The decline in cryptocurrencies is a global event. Central banks’ rate increases and the dollar index’s rise have resulted in decreased trading activity and price drops. Volumes have decreased, and traders (speculators) are booking Losses.”
Gupta went on to say, “Coinbase, a cryptocurrency exchange facility in the United States, has released Q1 financial results that show a significant decrease in retail trades of cryptocurrencies although institutional trade numbers have remained relatively constant.”
Could bitcoin hit $100,000 In 2022
Bitcoin has had a bumpy start to the year, but experts still believe it will reach $100,000 — and it’s more a question of when than if.
Investors are concerned about rising inflation, geopolitical tensions, and the prospect of tighter monetary policy by the Federal Reserve. The crypto market has been increasingly correlated with the stock market in recent months, making it even more dependent on global economic conditions.
With no end in sight, the war, inflation, and fluctuating monetary policy in the United States will continue to produce more volatility in the weeks and months ahead, they warn.
Bitcoin has only risen above $45,000 for a few brief periods in the past six months and hasn’t surpassed $50,000 since Dec. 25, 2021. Bitcoin’s current price is far from its all-time high of over $68,000 set in November. Even with the recent drop in price, Bitcoin is still far more valuable than it was just a few years ago. These sorts of rises and falls are nothing new for Bitcoin.
Despite the volatility and recent price fall, many experts still believe that Bitcoin will reach $100,000 soon, albeit with varied estimates on when it will happen. According to a recent study by Deutsche Bank, approximately a quarter of Bitcoin investors expect Bitcoin prices to be over $110,000 in five years.
Is the Crypto market crashing
According to experts, the price fall indicates a declining risk appetite among investors. They appear to be very concerned with risky assets. It is one of the most volatile investment owing to its uncertainties and variations.
Since Friday, the number of liquidations has been high, perhaps due to investor panic. Bitcoin and Ethereum have dropped about 7% each and are now valued at US$25,000 and US$1,300, respectively. The bearish trend may continue in the days ahead.
Although bitcoin has a long history of underperformance, altcoins are now facing additional challenges due to the potential for regulatory barriers. According to a CoinDesk analysis, only a tiny number of altcoins will survive such market swings.
The increasing food, gas, and energy prices are putting a lot of strain on the bitcoin market, according to Shivam Thakral, CEO of BuyUcoin.