facing a breaking point? This is something that some investors, helpers and others may be considering, as the decline in cryptocurrency accelerates over the weekend. The world’s number one digital asset was last traded at $ 18,654, down from more than 70% of its peak of about $ 65,000, with some of the wider crypto market feeling as if it were free-falling.
“Psychologically, for many people, this is desperate,” said Charles Hayter, CEO of CryptoCompare, a company that provides data and analysis for the crypto market.
Speaking to MarketWatch in an interview over the weekend, Hater admitted that the risks inherent in bitcoin are part of its appeal.
Yves Lamoureux, president of the Montreal-based macroeconomic research firm Lamoureux & Co., says debts in the cryptocurrency market have intensified recent fluctuations, with a number of heavily indebted companies facing margin and margin claims. this mysterious version of the business of Wall Street banks. “If my reading is correct, this is a massive liquidation of a huge leverage in the system,” Lamure said.
“It’s too easy, as usual, because bitcoin is over this time [extending]”He said.
Cryptocurrency creditor Celsius Network LLC has reportedly hired restructuring lawyers from Akin Gump Strauss Hauer & Feld LLP to advise it after the company told consumers it was pausing all withdrawals, swaps and transfers between accounts. “Due to extreme market conditions. ”
On top of that, a major player in decentralized financial markets, or DeFi, a corner of the crypto world where traders often seek to make money from leveraged cryptocurrencies, has faced its own challenges.
“We are seeing rapid cycles of Minsky in this space,” Hayter said.
Economist Hyman Minsky, who died in 1996, is engaged view that a period of distortions in the financial system ends very badly.
Signs of problems in the crypto markets appeared in May with the collapse of Terraan algorithmic blockchain of stable coins tied to fiat currencies such as the dollar, which are designed not to maintain their value relative to the fixed.
“Bitcoin has already fallen apart [and is] we are now seeing a significant decline, ”Katie Stockton, a market analyst at Fairlead Strategies, told MarketWatch ahead of Saturday’s report on bitcoin technical levels.
She said the collapse of bitcoin was not 100% confirmed, but called sentiment much worse. If the negative momentum continues, she said, she sees the next support at $ 13,900, based on her analysis.
Hayter said the current situation should be seen as the norm for bitcoin and the like, “maybe”, he speculated, “the next iteration to allow regulation to reinforce natural weaknesses”.
As is typical of cryptocurrency supporters, optimism prevails: “I think bitcoin is good,” Lamure said. “It goes from weak hands to strong hands.”
While bitcoin is down 59% in 2022, the stock benchmark S&P 500
decreased by almost 23%. Dow with blue chips
decreased by 17.8%. gold
rose by 0.61% and the US dollar index
by more than 9%.