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Bitcoin & Ethereum have reached critical levels
24 January 2022     1158

Bitcoin & Ethereum have reached critical levels

Cryptocurrencies have lost hundreds of billions of dollars since the collapse of the entire market. The total crypto market fell more than $ 200 billion overnight to $ 2.6 trillion, even though it was likely to reach $ 3 trillion the previous week.

Both Bitcoin and Etherium, the worlds two largest cryptocurrencies, are currently weak, with analysts saying the situation is likely to worsen.

According to Reuters, Bitcoin is currently at $ 60,000, the lowest during the day at $ 58,400 and Etherium at $ 4,244, a 14% drop from the peak ($ ​​4,868)


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Reasons


The reason for this, with great enthusiasm, is making money by selling coins during the upgrade (which we mentioned in a previous blog). Additional factors include high US inflation and Chinas new directive to ban cryptocurrency mining

Bitcoin has doubled in price since January. His correction could be very radical if he dropped to $ 58,000, according to Craig Erlam, Oandas senior market analyst, according to Reuters.

This is roughly the period when he gained strong support at the end of October, and given that it has been difficult to take steps since then, it may be a catalyst for greater correction, according to Erlam.

Twitters refusal to invest in crypto and the U.S. government (SEC) refusal to fund the Bitcoin exchange both have a negative impact on value.


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Analysis

It would not be surprising if bilateral volatility is noted after $ 68,000 to $ 57,000.

However, not everything is going badly. The Staples Center, hosted by the LA Lakers in a Los Angeles suburb, will henceforth be known as the Crypto.com Arena. This agreement was reached as a result of a merger with a Singaporean crypto company. 


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Last week, hesitation was clearly observed among traders regarding the future positions of Bitcoin. The average investment rate fell to 0.00354% on Tuesday, according to CryptoQuant. Which is the lowest rate since September. For comparison in November it was 0.04122%.

This investment figure reflects the general attitudes towards multiple Bitcoin derivatives in the market. A positive percentage indicates that traders are expecting a long one, while a negative percentage indicates a short one.

One of the pluses of this news is that the indicator points to balancing, which is nice news between constant long / short variations.

Bitcoins various products reached a record high of $ 9 billion, which was crowned at $ 151 million the previous week.

While the input is positive, the frequency is relatively low in the second phase according to CoinShares, which means we are dealing with about $ 750 million (compared to the $ 960 million in the first phase).


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Price fluctuations

According to the AP, Binance CEO Chengpeng Zhao believes that Bitcoin fluctuations are caused by its small market (especially if we compare it to traditional holdings). The higher the market value of a particular property / stock, the less volatile the price. There is nothing surprising in this.

Lets say we are looking at a small coin with a market value of $ 10 million. If someone paid $ 1 million to buy it, the price would rise much more than 10%. This is due to the fact that not everyone sells the same coin, consequently the supply decreases while the popularity and perceived openness increases.

But when it comes to $ 100 trillion in assets, $ 1 million already does not change much.

In general, an investment strategy is recommended as follows: If you have responsibilities to various institutions, it is better to invest your money in trusted funds such as a state fund or a specific firm (depending on what your financial analyst recommends).

(By the way, European stock indexes rose significantly yesterday, while US indices strengthened against the dollar, which exceeded expectations, as a result of comments from the Federal Reserve (FED).)

But if you have the extra money to do a lot of other things, here are a lot of exciting opportunities related to cryptocurrency.

Ika

Ika