Friday, December 9, 2022
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Why Is The Cryptocurrency Market Constantly Declining?

According to cryptocurrency traders on Twitter, the market is now seeing a continuous decline. And, as the daily close approaches (according to candlestick charts), it appears that the sell-off in Bitcoin BTC tickers is down $17,673, with other cryptocurrencies following suit.

The price of Bitcoin hit a new yearlong low on November 9, falling to $16,661 at its lowest point. This brought the price down to levels not seen since November 2020, when the bull market that propelled BTC to an all-time high of $69,400 started.

Over $200 billion was wiped out from the global crypto market:

 

 

Concerns over the financial stability of FTX and the potential role that prop trading company Alameda Research may have played in the fiasco continue to be the key reasons driving the present bloodbath in the market. In addition to this, there are whispers that the hole in FTX’s balance sheet might be as huge as $6 billion. Since it is now obvious that Binance will not acquire the struggling exchange, investors are already intensifying their risk-off stance toward crypto assets. This is happening as a direct result of the news that Binance is not going to buy the exchange.

The Terra bank run in May 2022 and the final collapse of LUNA, which has since been renamed as LUNA Classic, resonated across the cryptocurrency market. Because of this, Bitcoin went on its first seven-week losing streak ever.

Analysts are drawing comparisons between the recent bank run at FTX, the reported big hole in the budget, and what occurred with Terra earlier this year. These concerns are adding to the anxiety that investors already have about the bitcoin business as a whole.

The cryptocurrency sector and authorities have a long history of not getting along, either as a result of numerous misunderstandings or skepticism regarding the real use case of digital assets. This has been the case for a variety of reasons.

Due to the absence of a functional regulatory framework for the cryptocurrency industry, numerous nations and states have enacted a variety of policies that are in direct opposition to one another regarding the manner in which cryptocurrencies are classified as assets and the particulars of what constitutes a legitimate payment system.

The industry’s development and innovation are both hampered by the lack of clarity around this issue, and many experts are of the opinion that cryptocurrencies will not become mainstream until a set of regulations is implemented that is more widely understood and can be generally agreed upon.

The mood of investors has a significant influence on the value of risky assets, including Bitcoin and other cryptocurrencies. Even now, the possibility of cryptocurrency laws that aren’t user-friendly or, in the worst case, a complete ban, has an effect on the price of cryptocurrencies almost every month. 

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Reporter
Jeewan Singh is CryptoShrypto’s content writer and a seasoned writer with over two years of experience in writing about Indian Securities Market. Jeewan's participation in Blockchain and Cryptocurrency started in late 2020, and he hasn't looked back since. The technical and economic outcomes of cryptocurrency are what spark his curiosity, and he keeps one eye on the market.
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