Investors have endured a torrid week following a series of consistent downward movements in the price of bitcoin and other cryptocurrencies. This bloodbath has seen the market cap loose over $500 billion and around $800 million liquidated.
It happened so fast most analysts didn’t even get a hint of how much damage the bears were about to deal investors. In this article, we’ll look at three possible reasons why the global crypto market is bleeding profusely.
Why The Crypto Market is Bleeding
One of the most common causes of a crypto market crash is undoubtedly high liquidations. Not only does it wipe off humongous digits from the market cap, but it also promotes fear amongst investors, eventually causing some of them to FOMO. Over $700 million was liquidated yesterday alone.
The United States Inflation Rate
As a superpower nation, any major economic and financial fluctuations in the United States will most likely have a direct impact on the crypto market. Reports say the country’s consumer inflation rate is at an all-time high. The Federal Open Market Committee (FOMC) will meet later this month to deliberate on the issue and most likely introduce a new interest rate to curb inflation. The current rate which is pegged at 0.25%, could be raised by as much as 300%.
Russia’s Proposed Blanket Ban
Another reason why the global crypto market is bleeding is possibly due to reports that the Russian Central Bank is planning to introduce a blanket ban on cryptocurrencies.
In recent times the crypto market seems to have aligned in some way with the equity market, and this may be another reason for the bearish trend we’re currently experiencing.