Bitcoin drops below $ 25,000

Bitcoin drops below $ 25,000

Investors in the stock market and crypto have seen, more than ever in recent months, that markets are on a difficult slope. Determining how long the bleeding will continue is complicated, but a number of reasons may help to further understand why these red candles have been burning for some time.

Cryptocurrency and freefall

Bitcoin, Ethereum and cryptocurrencies lost value over the weekend, ending gains made over the past week. According to CoinMarketCap, the crypto market lost over $ 1 trillion in 24 hours. this equates to approximately 7.5%.

Bitcoin has broken below the $ 25,000 mark and is trading at the time of writing at $ 24,248. This is its lowest value of 2022 and also its lowest price for over a year. On the Ethereum side, it’s worse with a 28% drop over the last week despite the success of the merger test with Ropsten testnet. Last Friday, Ethereum developers shared their decision to delay this merger for another two months. This probably did not help the value of this crypto go up.

It is clear that the fall of cryptocurrencies only applies to BTC and ETH. All of the top 20 cryptocurrencies are in the red and have easily lost at least 10% of their value in the past week.

So we recorded -20% for BNB last week, 24% less for Cardano, XRP lost 18%, Solana 31%, Dogecoin 28%, Polkadot 28% too, Avanlanche 35% and MATIC 25%. The average lost value for these major currencies is 20%.

Winter established since May

The crypto market has not been stable since the beginning of the year, but especially since the beginning of May the digital winter is set in. It all started with a massive drop in major cryptocurrencies and then the attack that destroyed the Terra Luna ecosystem (although a recent study seems to put the fall of Bitcoin due to the collapse of the technology market). This market continued to lose value, pulling cryptocurrencies down with it.

Last week, the fall was accelerated inflation index which showed an increase of 8.6% compared to May 2021. A figure not achieved since 1981. For years, Bitcoin seemed unpredictable against the more traditional market and was touted as the one that could go in the face of inflation. It turns out that everything has changed since the beginning of 2022, so much so that its correlation index has never been higher with the S&P 500 and the Nasdaq since 2020.

Finally, still, hand in hand, the crypto market and the technology market continue to fall and it’s hard to know how far it will go. Especially in a context where the Covid-19 period is still relevant, the uncertainty of the conflict in Ukraine or the mistrust that has existed since the Terra Labs relationship occurred when the UST stablecoin collapsed. So this is what brings us to a weakened market that is currently struggling to turn the tide.

While some investors are taking advantage of this moment to make stock, care is still in order. We remind you that you should only invest what you are willing to lose. In addition, it is also recommended to go for a reliable platform for buying cryptos. In this context, we can cite eToro as an example.

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