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Significant Factors Behind the Crypto Market Slump

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Significant Factors Behind the Crypto Market Slump
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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.