- Bitcoin hasn’t had such low quotes since December 2020 and, in falling, breaks another “strong” technical support
- Due to the pace of the decline, the forecast moved to the level of 20,000 hole. for bitcoin
- The market value of all cryptocurrencies has fallen to just over $1 trillion, and in November of last year was still worth $2.9 trillion.
- All this is a consequence of a return to normality in monetary policy in the world
- More information can be found on the main page of Onet.pl
On Monday, the price of bitcoin, the most popular cryptocurrency in the world, fell below 25,000 for a while. dollars, or 9 percent. During the week, the drop is already 20%. These low prices were last seen in December 2020. And not only is bitcoin losing, but capital is depleting across the entire market, i.e. outside of dollar-linked cryptocurrencies one vs. a.
In total, the value of all cryptocurrencies has already halved this year, i.e. by a trillion dollarsand from the peak moment in November last year. up to $1.9 trillion It is on the verge of knocking all cryptocurrencies below $1 trillion, which last happened in early February 2021.
Capitalization of all cryptocurrencies
Already the descent of bitcoin below 29 thousand. hole. It was an important moment because at this level he had solid technical support. And the market for currencies made from the air is basically driven only by technicalities. If the fundamental valuation was decisive, i.e. the size of the actual trading of bitcoins, the quotation levels would be much lower. After the break of the support, new technical forecasts appeared, falling to 20 thousand. dollars, that is, the maximum from 2017. And let’s recall last August. the price exceeded 67 thousand. hole.
Relative Strength Index (RSI) readings indicate an oversold market and potential trend reversal, but in the case of cryptocurrencies, nothing is really certain, as the highly speculative market has too often failed to respect no rules.
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One of the reasons for Monday’s collapse is cryptocurrency lender Celsius Network’s decision to halt withdrawals and transfers between accounts due to “extreme market conditions”. The Celsius Network, which raised $750 million late last year, is a big player in cryptocurrency lending. It offers interest-bearing products to customers who deposit their cryptocurrencies with the company and borrow cryptocurrencies for return, which is a kind of crypto market banking.
The company had processed $8.2 billion in loans, according to the website, as of May 17. and had assets of $11.8 billion. In August last year its assets were worth up to $20 billion.
Why are cryptocurrencies falling?
Why are cryptocurrencies falling? For the opposite reason they grew up before. They won because interest rates were at or near zero and states were printing money that had to have an outlet somewhere since there was no official inflation. Investors were buying real estate, and that’s stocks, and that’s cryptocurrency, so the prices of those assets were going up.
Today, however, we have an environment of record inflation in decades – the United States has reached its highest level in 40 years – and interest rates have risen. And as interest rates rise, bond rates also rise, so investors start buying them again, drawing money out of other assets. The bursting of bubbles, including in the real estate market, is increasingly talked about. Money is also leaking out of stock exchanges. The reason the bubbles were inflated was the old “cheerful” monetary policy of central banks with overprinting and zero rates in response to the pandemic.
In May, the US Federal Reserve raised its key rate by 0.5 percentage points. percent to 0.75-1%, and the CME futures market is already forecasting that at the meeting on Wednesday, June 15, there will be another 0.25 point rise. percent 24 percent chance can be increased up to 0.5 point. percent At the same time, the market believes that if there is no 0.5 points on Wednesday, only 0.25 points. percentage point is another 0.25 points more. percent will appear in July, and more in September. In February next year, the rates with a probability of 68 percent. should be at the level of at least 3.5-3.75 percent. – results from the quotation of Fed CME futures.