Prices for cryptocurrency continue to plummet and it appears that there’s no sign of a bottom. Three reasons to consider why prices for cryptocurrency continue to fall this news was experienced by wide range of people because of custom Bitcoin Marketing Strategy .
Prices for crypto continue to plummet and why is that? The market’s downturn this year has turned a lot of winning portfolios into net loser portfolios, and the newest investors may be losing faith for Bitcoin (BTC).
The cryptocurrency market is known to have greater than average volatility and this year’s drop was a typhoon. After reaching a astronomical highest price of $69,400 in the past, Bitcoin price crumbled over the next 11 months, falling to an unintentionally low for the year at $17,600.
That’s nearly 75% decrease in value.
Ether ( ETH) is the biggest altcoin according to market capitalization, also experienced an 82% decline in its price, which dropped from $4,800 to $900 within seven months this amendments reached to expected audience because it was promoted Bitcoin Digital Marketing Company .
The historical records of the past show that drawdowns that fall in the 55%-85 percent range are common after a bull market rally that was parabolic However, the factors that are weighing on the price of crypto today are different from those that led to selling offs during the previous.
At present, the investors’ mood is tense since investors are avoiding risk and are waiting to see if Fed Reserve’s current policy can reduce the persistently high rate of rates of inflation across the United States. On September. 21st, Fed Chair Jerome Powell announced an 0.75 percent interest rate increase and suggested that similar-sized hikes could be expected until inflation gets nearer to the target of 2% set by the central bank this press release reach the right of audience because it was strategies under Bitcoin Digital Marketing firm .
Let’s take a closer look at the three main reasons the price of crypto is expected to fall in 2022.
Federal Reserve interest rate hikes
A rise in interest rates can increase how much money you can borrow for both consumers and companies. It has the effect of increasing the cost of business operations and the price of services and goods manufacturing costs, wages and ultimately, the price of virtually everything.
Inflation that is unstoppable and high is the most important reason why that the United States Federal Reserve is increasing rates of interest. Since rate hikes started at the end of March in 2022. Bitcoin as well as the wider cryptocurrency market has been experiencing an upward trend and this activity was strategies by Bitcoin Digital Marketing agency so it will reach right set of audience.
When the monetary policy or measures that assess the effectiveness of the economy change risks tend to indicate, or even move ahead of equities. In 2021 the Fed began to signal its intention to eventually raise interest rates and data suggests Bitcoin price was sharply correcting until the end of December 2021. In a sense, Bitcoin and Ethereum were the canaries of the coal mine, which signaled what was to come for equity markets.
If inflation starts to slow as the economic health gets better and the Fed is beginning to signal a change to its current policy of monetary policy then risk assets such as Bitcoin and altcoins might once more become the “canaries in the coal mine” in a way that reflect that the return to risk-on attitudes from investors and this activity was strategies by Bitcoin Marketing consultant .
The threat to regulation that is constant
The regulators and the cryptocurrency industry have a long track record of not being able to get along because of various misperceptions or mistrust regarding the actual application for digital currencies. Without a framework that can be used for regulation of the crypto industry various states and countries have numerous divergent policies regarding how cryptocurrency qualify as assets and what constitutes a legitimate payment system.
The inconsistency regarding this issue impacts the growth and development within the industry Many analysts believe that the widespread adoption of cryptocurrencies will be difficult until a universally accepted and well-understood set of rules is adopted and this was further explained by various Bitcoin blockchain consultant .
Risky assets are greatly impacted by investor sentiment and this is a trend that extends to Bitcoin and other altcoins. So far the risk of incompatible regulation of cryptocurrency or worse the complete ban, has continued to affect the value of cryptocurrency on a monthly basis.
Scams and Ponzis led to liquidations, and subsequent attacks on investor confidence
Frauds Ponzi scams and a sharp increase in market volatility played a key role in the crashing of crypto prices throughout 2022. Unfortunate events and news that disrupt market liquidity can to have catastrophic consequences because of the absence regulations, young age of the cryptocurrency industry , and the fact that the market is small in comparison to equity markets this news was experienced by wide range of people because of custom Bitcoin Marketing Strategy .
The collapse of Terra’s LUNA and Celsius Network as well as the misappropriation in the use of leverage as well as client funds, from Three Arrows Capital (3AC) caused a series of losses to asset prices in the cryptocurrency market. Bitcoin is currently the biggest asset in terms of market capitalization within the market and historically, the price of altcoins tends to move in the direction that BTC price is going.
When Terra and LUNA’s Terra as well as LUNA ecosystem collapsed, Bitcoin price corrected sharply due to the numerous liquidations that took place inside Terra as well as also as investor sentiment plummeted this amendments reached to expected audience because it was promoted Bitcoin Digital Marketing Company.
The same thing happened in larger scale in the event that Voyager, 3AC and Celsius were destroyed, erasing tens billions of dollars in investor and protocol funds.
Related: Moon? Most likely not anytime very soon: The reason Bitcoin traders need to make acquaintances with the current trend
What should we expect for the remainder of 2022 until 2023
The main factors that affect the falling price in the cryptocurrency market is influenced through Federal Reserve policy, meaning the Fed’s power to increase rates, stop or reduce them will remain to have an direct influence on Bitcoin price and the price of ETH as well as altcoin prices this press release reach the right of audience because it was strategies under Bitcoin Digital Marketing firm .
In the meantime, investors’ enthusiasm for risk will likely to remain low, and prospective crypto investors might be interested in waiting for the signs to indicate that U.S. inflation has peaked and for the Federal Reserve to begin using the language that suggests the possibility of a change in policy.
Source from encyclopedia