The declining value of cryptocurrencies is scaring the entire investment community. The recent revelation of on-chain data shows that the Bitcoin price has now once again dipped below the predicted price, indicating that the bear market may be on a freefall. Reports suggest that the overall crypto market capitalization has just dropped to the US$1 trillion support, powered by plummeting stablecoin demand and a large decrease in investment appetite in the crypto investor community. The worsening conditions are not just exclusive to the crypto markets. The values of traditional assets are also decreasing at a rapid rate.
Under adverse circumstances, the investment community is feeling less confident about the central bank's policies of requesting more money to hold those debt instruments. Within a period of one week, the Bitcoin price has decreased by over 9%. Accompanied by these factors, Ethereum, Cardano, and other small tokens have experienced sharper declines. Currently, digital assets are getting punished as investors panic that the Fed might raise interest rates again to combat inflation. However, optimism around ETH 2.0's upgrade is definitely aiding the crypto market to enhance its value.
The risk-off attitude is plummeting due to surging inflation eventually declining the prices of growth stocks, commodities, and cryptocurrencies. Hence, traders will most probably seek shelter under the stability of the US dollar. Even though Bitcoin is at an affordable range right now, analysts believe that long-term investors would be adversely affected if Bitcoin dips below its present resistance.
At the time of writing this article, the Bitcoin price revolved around the US$21k mark, after diving right from US$24,000. For quite a long period of time, the BTC price has been congested around this mark. The core complexity around this point is that if BTC stays at this point for a long period of time, it might soon plummet down below US$20,000, and then maybe to US$15,000, allowing Ethereum to take over as the largest cryptocurrency in the market.
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