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The cryptocurrency market has been under pressure recently, with major crypto currencies losing about 25% of their value in only four days. The bulk of the tokens have dropped by double digits in the preceding seven sessions.
The new round of selling follows a request by Russia’s central bank for a crypto crackdown. Russia’s central bank proposed a ban on cryptocurrency usage and mining on Russian territory on Thursday, citing worries about financial stability, human well-being, and the country’s monetary policy autonomy.
The move is the latest in a global cryptocurrency crackdown, as governments from Asia to the United States fear that privately managed and very volatile digital currencies would undermine their power over banking and monetary systems.
The statement by Russia, one of the world’s top crypto users, dampened the market atmosphere and sent the digital asset market into the red.
While this is cause for concern, the crypto business has withstood several prohibitions, limitations, and governmental scrutiny over the years and has survived.
Based on how the industry rebounded immediately after China’s crypto ban, we may expect the sell-off to have no long-term influence on crypto’s performance beyond this temporary drop.
Other concerns, such as lacklustre macroeconomic circumstances, rising oil costs and Federal Reserve tapering signals, rising inflation, and a collapse in the technology industry, are adding to investors’ troubles.
Bitcoin has broken through the $39,000 barrier, having dropped more than 11% from its high. Ethereum, its equivalent, fell 14% to hit $2,800 levels.
The suffering among altcoins has been more severe, with BNB, Cardano, and Polkadot losing up to 18% in the previous 24 hours, according to Coinmarketcap statistics.
Volatility is one of the most distinguishing characteristics of cryptocurrency markets, and it is also critical to understand the market cycle.
The ambiguity surrounding the Crypto Bill throughout the world is one of the causes that has caused cryptocurrency values to fluctuate. China’s shutdown of Bitcoin mining in Sichuan province has also resulted in a drop in crypto market value.
Weekly, Bitcoin and Ethereum have lost 10-13 percent of their value, while other prominent altcoins like as Dogecoins, Solana, Avalanche, and Polygon have lost 16-25 percent of their worth.
The overall market valuation of crypto assets has fallen below $1.9 trillion, owing to poor trading volumes, which have recently been around $75 billion per day.
In other developments, the US Securities and Exchange Commission (SEC) denied a filing by First Trust Advisors and SkyBridge, the hedge fund formed by former White House communications director Anthony Scaramucci, to list and trade a spot bitcoin exchange-traded fund.
The First Trust was rejected by the SEC. SkyBridge Bitcoin ETF Trust was the most recent in a string of vetoes by the regulator over the listing of spot bitcoin ETFs, which attempt to give convenient exposure to the digital currency.
These denials by regulatory agencies throughout the world have damaged investor trust in digital assets, resulting in a significant selloff.
The downward trend is expected to create havoc for investors, according to Edul Patel, CEO and Co-founder of Mudrex, who added that the following week will be critical for the crypto spectrum.