Over the past few years, the crypto has experienced an unheard-of rise and a precipitous fall.
According to buidlbee.com, after record prices in 2021, the price of Bitcoin has already fallen by 58% since the beginning of 2022, a discussion about the regulation of cryptocurrencies has begun in the world, and in addition, electricity bills for mining have increased. It became difficult for miners to compete with each other, and they began to sell video cards.
Below, we will talk about 5 tokens that are updating their historical low and which should be avoided.
FTX
The cost of the native token of the FTX crypto exchange (FTT) has fallen by 72% in a day, to the current values of about $4.6. A sharp collapse in altcoin quotes occurred on the evening of November 8, when they fell from $19 to $3 in a few hours.
BTC
The bitcoin exchange rate has been updated for at least two years. The price of the first cryptocurrency on the evening of November 8 in 2.5 hours dropped by $3,000 – from $20,600 to $17,580 for the first time since November 2020, and on November 9, the price of bitcoin fell to $15,920. On major cryptocurrency exchanges, the cost of BTC in spot trading fell to 17,160 USDT, futures cost up to 16,800 USDT.
ETH
Ethereum was trading at $1,700 in September, but dropped to $1,200 in October. Its trajectory was repeated by the most capitalized altcoins. Ripple (XPR) fell to $0.32 that day, Cardano (ADA) to $0.45, Solana (SOL) to $34.64. And analysts noted that market capitalization fell below the psychological mark of $1 trillion.
DOT and AVAX
Polkadot and Avalanche are down over 14%, while Dogecoin is down over 28% at the moment. Cryptocurrencies have fallen after it became known about the potential takeover of rival FTX by Binance crypto exchange.
But stocks of companies whose activities are related to cryptocurrencies fell even more, including Riot Blockchain (70.5%) and Coinbase (83.73%).
Reasons for the fall of the cryptocurrency market
The main reason for the fall of the crypto market is the same as the fall of the stock market, namely, inflation in the United States that has accelerated to a 40-year high.
According to experts, it is not only about cryptocurrency, but also about the global situation as a whole. We are witnessing a global economic downturn caused by the long months of the pandemic, and now also by the war in Ukraine. Inflation is rising, interest rates are rising, living standards are falling.
As a result, large investors are no longer so freely dispose of their funds, and many ordinary investors have nothing to invest at all. And even if it were, who would want to take risks with such unpredictable assets as cryptocurrency, which is not protected in any way and is not regulated by financial authorities.
The dynamics of the crypto market shows that periodic crashes are a natural phenomenon. It is impossible to predict it with accuracy, besides, some events can speed up or slow down the process – just remember how Elon Musk pumped dogecoin and other cryptocurrencies.
But, by observing the dynamics of the market, you will gradually be able to upgrade your crypto awareness.
Future
Analysts and economists, speaking about cryptocurrency, traditionally give a more emotional forecast than for the stock market, based primarily on their fundamental belonging to the number of crypto-skeptics or crypto-enthusiasts. The former are always waiting for the collapse of bitcoin, the latter predicts a new record for it.
If we assume that the dynamics of the cryptocurrency market will continue to correlate with the stock market, then analysts do not yet make optimistic forecasts for the latter. The S&P 500 is expected to fall to 3,400 by the end of the year in a base case that does not assume a recession in the US. If it does come, then the index will drop to 3000 points. Goldman Sachs chief equities strategist Peter Openheimer said the bulls’ expectations before the end of the year will not come true: stock markets have collapsed, but they must fall even more to win back global downside risks to economic growth in the US, China and Europe.
However, Deutsche Bank analysts, in the summer, were confident that by the end of the year bitcoin could reach $28,000 just due to the recovery of the economies of developed countries and the stock market.
