Crypto: The reasons behind the market decline
As usual, the crypto market is facing a bearish scenario. This is not insignificant. It is in fact due to the accumulation of several factors that particularly influence crypto investors’ confidence. Here’s the situation.
Crypto wavers as the Fed has no plans to cut rates!
The crypto market is experiencing a significant pullback today. It is influenced by a confluence of factors that have shaken investor confidence and created uncertainty about the direction of the sector in the short and medium term.
At the forefront of these factors is the unexpected announcement by the Federal Reserve (Fed) Jerome Powell regarding rates. Indeed, the Fed recently dismissed the idea of a cut, which crypto investors had been anticipating.
This stance by the Fed, focused on maintaining rates, has caused shockwaves in the financial markets. This triggered a drop in the price of bitcoin (BTC), the most popular crypto on the market. BTC fell by 0.76% over the last 24 hours to settle around $42,235.
Other factors exacerbating the situation!
The increased selling activity among bitcoin (BTC) miners during the recent price surge adds to the downward pressure on the crypto market. On-chain data analysis reveals that miners are frequently withdrawing their holdings from exchanges.
This trend has a significant meaning. It indicates a desire of these crypto players to secure their profits. A choice related to concerns about the limited price valuation in the short term.
Currently, the risk of a decline in confidence among bitcoin (BTC) miners seems low. However, continuous selling pressure could lead to an excess supply of BTC. This, in the medium term, would exert downward pressure on the price of the crypto.
Moreover, the prospects for the crypto market seem to be gloomy. Persistent inflationary pressures, amplified by the fear of an economic slowdown, raise questions. Specifically, regarding the viability of speculative assets like bitcoin (BTC) as a hedge against traditional market risks. In this context, analysts warn against an immediate market reversal and advise investors to approach BTC’s periodic recoveries with caution.
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Diplômé de Sciences Po Toulouse et titulaire d'une certification consultant blockchain délivrée par Alyra, j'ai rejoint l'aventure Cointribune en 2019. Convaincu du potentiel de la blockchain pour transformer de nombreux secteurs de l'économie, j'ai pris l'engagement de sensibiliser et d'informer le grand public sur cet écosystème en constante évolution. Mon objectif est de permettre à chacun de mieux comprendre la blockchain et de saisir les opportunités qu'elle offre. Je m'efforce chaque jour de fournir une analyse objective de l'actualité, de décrypter les tendances du marché, de relayer les dernières innovations technologiques et de mettre en perspective les enjeux économiques et sociétaux de cette révolution en marche.
The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.