Significant Factors Behind the Crypto Market Slump
The crypto market struggled throughout the previous week, the bearish trend obstructed the market’s consolidation, and cryptocurrencies have failed to recover. The crash earlier this year led to a severe downfall in crypto prices; crypto giants Bitcoin and Ethereum fell to record lows in June. Bitcoin entered a two-month price rally that shot up its price near the $30,000 mark. However, the price fell last week, with Bitcoin struggling to break through the $22,000 mark. Ethereum too showed great promise and was set to rise above the $2,000 mark until last week, when the bearish market returned and retraced the price below $1,700. Cryptoticker reports that the global crypto market cap dipped around $2 million since November last year.
The bearish market has a long-term effect
The crypto market has shed significant gains over the last two weeks and is again on a bearish path. The Ukraine war decreased the crypto’s market cap to $800 million. However, the recent recovery has pushed that figure marginally above the $1 trillion mark. Cryptoticker reports crypto tokens witnessed an average 72% loss during the same period. Several analysts predict further downfall and record lows for cryptocurrencies. The bear market has strangled the bullish factors and will likely persist for the next 1-2 years. Major cryptocurrencies might not witness a continuous price rise in the short term.
Other market factors
Investors are overhyped about Ethereum’s next month’s Merge. Investors tend to take a secure path to avoid a significant loss. Analysts predict a further downfall in Ethereum’s price post the Merge. The crypto market suffered a lot due to the Fed monetary policy surrounding the slow economic progress and the high inflation rate. The interest-rate hike in November this year might be a key influencer in the crypto market. The negative factors have triggered a sell-off, leading to a price slump.