The price of Ethereum and Bitcoin has stabilized after heavy losses but pessimissm is still rife in the crypto market. How can the market recover after such massive losses? In this article, we’ll explore the factors that caused the price of these cryptos to fall in the first place, and look at possible reasons why they might rebound soon.
Ethereum stabilizes after pessimism reigns in crypto market
After weeks of volatility, Ethereum has stabilised after pessimism reigned in the crypto market. Most crypto players are pessimistic about bitcoin’s future, and the sharp price drop last Friday prompted traders to pull out of the market. The market has suffered due to fears of contagion and Washington regulators’ interest in the financial stability of crypto assets.
Meanwhile, Cardano’s ADA has tumbled by 2% overnight to $1.11 from $1.48 seven days ago. Cardano’s hotly anticipated “Mary” hard fork, which came and went on March 1, is no longer in effect, but it’s still struggling to catch up to Ethereum in terms of market cap. Theta’s eta token and the eta token fell 10% on Monday and last week, but are up 20% from last week’s lows.
Although many investors are hesitant to invest in the cryptocurrency market, the booming economy of Silicon Valley is providing plenty of opportunities for those who are patient. There’s no guarantee that the cryptocurrency market will remain stable, however. The market is prone to extreme volatility, and investors may lose money on their investments. Therefore, it’s important to understand the risks and rewards associated with cryptocurrency investment.
Bitcoin’s value fell to a fresh 18-month low on Tuesday, dragged by the prospect of a sharp interest rate hike in the United States. As a result, cryptocurrency exchanges, including Coinbase, have been forced to reduce their workforce. Coinbase Global has announced a massive job cut of 18 percent, and 1,100 positions are now under threat. This will surely impact Bitcoin’s price.
Bitcoin’s price stabilised around $30,000 in January, but analysts remain cautious about the stablecoin market. Some investors worry that stablecoins will not survive a downturn, and have withdrawn their money. One recent event prompted a sharp unwinding of leveraged positions, with the price of bitcoin plummeting to $16,500 in the span of a day.
Although Bitcoin’s price has stabilised, cryptocurrency companies linked to the cryptocurrency market have also been hit by the recent downfall. MicroStrategy Inc, a major bitcoin backer, said a drop below Sh2.4 million ($21,000) would lead to the need for extra capital. To meet this demand, MicroStrategy could sell some of its bitcoin holdings. But MicroStrategy did not respond to a request for comment on the matter after business hours.
Bitcoins stabilize after heavy losses
As the cryptocurrency industry has been hit by a series of massive losses in the past week, the biggest coin bitcoin is stabilizing after falling over 15% overnight. Bitcoin has been hit by the prospect of sharper interest rate hikes from the US Federal Reserve, which has sent the volatile asset class reeling. This slump in bitcoin is likely to affect other crypto companies, such as Coinbase Global Inc., which has announced plans to cut 18 percent of its workforce. The company has said that it will cut around 1,100 jobs to make up for the losses.
The losses were felt across smaller cryptocurrencies, as well. For example, ether was down 2.4 per cent after falling by up to 10 per cent. At one point, the coin reached a 15-month low, and it has fallen more than 75% since its record high in November. Despite the reversal, the market is now worried that Celsius may go bankrupt.
The cryptocurrency market has been driven by speculation and short-term price action, and the recent plunge in bitcoin prompted investors to pull their money from riskier assets. In addition to cryptocurrency, other asset classes have been hit hard, as the S&P 500 fell for four consecutive days. Crypto-linked stocks, such as MicroStrategy and Coinbase Global, have taken a beating.
Ethereum stabilizes after heavy losses
Bitcoin and Ethereum have stabilized after heavy losses but most players are pessimistic about their futures. As the value of the crypto market dropped below $1 trillion for the first time since January 2021, most crypto market watchers were pessimistic about the future of the coin. One such company, Coinbase Global, recently announced a massive layoff of 18 percent of its workforce, resulting in a loss of over 1,100 jobs.
The rise and fall of bitcoin and Ethereum has sent the crypto market into a panic. However, the recent decline in prices may only be temporary. The crypto economy is now worth more than $1tn and could crash, triggering conventional problems such as a recession. However, cryptocurrency has survived similar crashes before, and its current slump is believed to be just a period of time.
While terraUSD has been the main cause for the recent collapse in prices, the rise in popularity of other cryptocurrencies has also contributed to the fall. China banned the trading of cryptocurrencies in the country, but did not prohibit individual ownership. Furthermore, the Federal Reserve cut liquidity in 2021, which has resulted in a massive dip in prices. Despite stabilization, the market continues to show no signs of returning to its highs. The optimistic view of the crypto market says that we are heading into a ‘crypto winter’, while pessimists fear that the crypto industry is at the beginning of its demise.
The recent drop in bitcoin prices is similar to the drop seen in the stock market. It has risen in value since the IPO of cryptocurrency exchange Coinbase, but pessimism is still a prevalent mood in the market. Likewise, the failure of terra cryptocurrency project, which had once been valued at $50 billion, caused a further slump. Unlike stocks and bonds, crypto is subject to inflation, so a fall in its price could cause investors to liquidate their holdings.
On Tuesday, bitcoin hit an 18-month low after a steep drop overnight. However, the price pushed back into positive territory in the morning after the overnight decline. The price of bitcoin fell 7.3 percent overnight to US$20,816 and hovered near US$22,470. Bitcoin had fallen 15 percent on Monday, and is down 70 percent since its record high in November.
Meanwhile, Bitcoin-linked stocks have been particularly hard hit. Bitcoin-buying software company MicroStrategy and crypto exchange Coinbase Global were down over 15 percent and 11.4%, respectively. Both coins fell during premarket buying and selling on Tuesday. Coinbase Global and MicroStrategy both fell in premarket trading on Tuesday, but they jumped up 8.11 percent by midday.
