In June, cryptocurrency markets reached a fresh low of 2022. The worldwide crypto market capitalization decreased to $977 billion, below $1 trillion. After reaching $3 trillion in November of last year, the global cryptocurrency market capitalization has decreased by more than $2 trillion. Almost every major coin is currently worth half or even less than its all-time high.
The immediate cause of the crypto market fall appears to be a big investor sell-off amid heightened inflation fears and a halt in withdrawals by the crypto loan firm Celsius. In addition, investors continue to avoid risky assets, which is reflected in the stock markets.
The price of Ethereum has reached its lowest point in more than 14 months, trading at $1155.
According to CoinMarketCap data at the time of writing, Solana has declined by more than 15 percent and is hovering under the $27 mark.
The price decline of cryptocurrencies, according to experts, reflects investors’ declining risk tolerance. They are obviously leery of dangerous investments. Cryptocurrency is regarded as one of the most volatile investment tools due to its inherent unpredictability and volatility.
In recent months, the Federal Reserve has increased interest rates to combat inflation, exerting pressure on the cryptocurrency market. Bitcoin, Ethereum, and the majority of cryptocurrencies suffered losses over the weekend as a result of a widespread sell-off precipitated by news that US inflation reached a 40-year high, according to Edul Patel, co-founder and chief executive officer of crypto investment platform Murex.
“Since Friday, the volume of crypto liquidations has been considerable, as investors appear to have panicked.” Bitcoin and Ethereum fell as much as 7 percent each and are currently selling at record lows of $25,000 and $1,300 respectively. The gloomy trend is likely to persist in the days ahead,” he warned.
Despite the fact that other cryptocurrencies have typically underperformed Bitcoin, they now face the added strain of potential regulatory hurdles. According to a report by CoinDesk, only a tiny number of altcoins are likely to endure such market fluctuations.
CEO of cryptocurrency exchange BuyUcoin, Shivam Thakral, stated that rising food, gas, and energy prices are exerting great pressure on the cryptocurrency market, as Bitcoin and Ether have experienced double-digit losses over the past 24 hours.
“After the consumer price index announced the highest inflation rate since 1981, financial markets around the world experienced a severe decline,” Thakral explained.
In the coming weeks, the market is anticipated to remain volatile, and countries throughout the world will continue to record high inflation rates. The present decline in crypto prices enables investors to purchase cryptocurrencies at 2021 pricing, and we expect seasoned investors to capitalise on this opportunity,” he added.
According to Darshan Bathija, CEO of the cryptocurrency exchange Vauld, the majority of investors are concerned that the US Federal Reserve may have to tighten the reins by hiking interest rates at a faster rate than anticipated if inflation levels do not begin to decline soon.
Bitcoin in Zone of Overselling
“Bitcoin saw yet another big decline, falling to roughly $25,000, its lowest level in more than five months. Intriguingly, the Dollar Index(DXY) is also at a six-month high, rising 2% in the last day alone, which has caused a decline in the Stock and Crypto markets. The BTC trend has broken below the long-formed triangle pattern on the daily time period. A $24,000 quick and essential support is anticipated. The RSI fell below 30 as Bitcoin reached the oversold zone, according to analysts at WazirX Trade Desk.
During the same timeframe, Bitcoin’s Dominance surpassed the 48 percent threshold for the first time in nearly a year, while Ethereum’s value against Bitcoin fell by more than 11 percent.
“The daily chart for ETH/BTC has broken below the descending channel pattern and dropped below its prior support level of 0.055.” The next projected support level for ETH/BTC is 0.038,” they noted.
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