Why is Crypto Going Down and Will it Recover?

Why is Crypto Going Down and Will it Recover?

Crypto Why is Crypto Going Down and Will it Recover?

Why is crypto going down after outperforming projections earlier in the year? This is a question that many analysts and experts are considering at the moment. Bitcoin’s volatility is causing uncertainty in the crypto market that has forced investors into tough decisions with their portfolios.

Why is Crypto Going Down? Will the Slide Continue?

Bitcoin is the face of the cryptocurrency market. And the majority of price movement within the market is dependent on Bitcoin’s success or failure.

For example, most altcoins face volatility when Bitcoin begins to drop. Anything from negative press to government crackdowns can cause a chain reaction that leads to a crypto crash.

At the moment, Bitcoin is trading around $30,000 after hitting an all-time high of $64,829.14 in April of 2021. So, why is crypto going down so quickly after most digital currencies were reaching new highs in recent months?

This is because of recent government crackdowns and backlash that has led to market uncertainty and volatility. And while most experts believe it’s only a matter of time before the crypto market recovers, many investors are trying to determine if now’s the time to get in or get out.

So, let’s take a look at the bigger picture. Bitcoin finished June of 2021 down 6% and the volatility has continued into July. On the other side of the crypto spectrum, the “meme token” Dogecoin is down over 70% in the past two months after hitting an all-time high $0.740796.

According to a CryptoCompare, trading volume on Coinbase, Binance, Bitstamp and Kraken fell more than 40% in June. In fact, these are some of the largest and most popular cryptocurrency exchanges available. And in total, the crypto market lost over $1.3 trillion in a two-week span.

As you can see, the crypto crash has led to massive losses and less trading. Investors are moving away from cypto due to volatility concerns and other factors.

Crypto Crash Breakdown

You may want to know why the crypto crash occurred in the first place. And why is crypto going down at alarming rates at the moment?

This is due to a variety of factors, including public influence, bad press, government pressure and crackdowns.

In May, China banned financial institutions and payment companies from providing crypto-related services. China also shutdown Bitcoin miners throughout its country.

Around the same time, Elon Musk announced Tesla would no longer accept Bitcoin due to climate concerns. Musk intends to resume using Bitcoin for transactions once Bitcoin mining transitions to more sustainable energy.

More recently, the U.S. Federal Reserve has flagged digital assets for the very first time. Its semi-annual Monetary Policy Report to Congress noted that “asset prices may be vulnerable to significant declines should investor risk appetite fall, interest rates rise unexpectedly, or the recovery stall.”

And the risk appetite has fallen. The recovery is stalled. Investors are less willing to take on the risk due to volatility. As a result, crypto trading is rapidly dropping and the market is taking one hit after another.

Investing in Cryptocurrencies

The crypto market is in a difficult period at the moment. But that doesn’t mean it’s time to write-off cryptocurrencies for good. There’s still real investment potential in Bitcoin and many of the best altcoins, such as Ethereum, Tether and Litecoin.

To stay ahead of the latest crypto trends and analysis, sign up for the Manward Financial Digest e-letter below. You can discover the next big token to hit the market with daily updates and insights from the crypto experts at Manward.

Don’t overthink the current narrative surrounding cryptocurrencies. Will the market recover? Are more government sanctions on the way? Why is crypto going down after its rapid rise to start the year? Now is not the time to jeopardize your portfolio. As difficult as it may be, most analysts and experts believe you should hold on and keep a close watch on the crypto market for the time being.

About Corey Mann

Corey Mann is the Content Manager of Investment U. He has more than 10 years of experience as a journalist and content creator. Since 2012, Corey’s work has been featured in major publications such as The Virginian-Pilot, The Washington Post, CNN, MSNBC and more. When Corey isn’t focusing on Investment U, he enjoys traveling with his wife, going to Yankees games and spending time with his family.

Bitcoin heads toward lowest level in 2021 as crypto’s slide continues with stock-market rout

Bitcoin was under pressure Monday, with the world’s No. 1 crypto trading near its lowest level since Jan. 1, according to data compiled by Dow Jones Market Data.

The decline for bitcoin BTCUSD, -3.44% comes as general risk appetite on Wall Street was deteriorating, amid growing concerns about the spread of the COVID-19 delta variant and worries about growing tensions between China and the U.S., which come at a vulnerable time for asset valuations that have been broadly heading higher.

On Monday, bitcoin was changing hands at $30,820, off 2.7% on CoinDesk and down more than 50% from its mid-April peak. Ether ETHUSD, -4.34% on the Ethereum blockchain was off by about 4%, changing hands at $1,822.60. Ether values are off nearly 60% from highs put in early May. Ether is trading around its lowest levels since June 27.

In other digital assets, dogecoin prices DOGEUSD, -5.82% were down 5% at 17.5 cents, off more than 75% from its early May peak.

Check out: Why did the Dow tumble Monday? Economic growth is now a bigger worry than inflation.

The tumble in crypto has been in force for weeks and blamed on a regulatory crackdown in China. The People’s Republic has placed a ban on trading in bitcoin and the government also has banned popular apps from trading in crypto.

Monday’s trade for crypto comes as the Dow Jones Industrial Average DJIA, -2.09% suffered its worst day since Oct. 28, falling 726 points or 2.1%. The S&P 500 SPX, -1.59% and the Nasdaq Composite Index COMP, -1.06% also saw sharp declines. The equity selloff also coincided with a drop in benchmark 10-year Treasury yields TMUBMUSD10Y, 1.197% to under 1.18%, reflecting a flight to the perceived safety of haven debt.

Crypto and stocks aren’t correlated but sometimes strategists view the assets as measures of risk appetite on Wall Street.

Bitcoin, meanwhile, has been knocking on the door of trading below $30,000, which is seen by some as a level of support that if the crypto falls beneath could fuel further selling.

However, Katie Stockton of Fairlead Strategies remains bullish on bitcoin in the short-term and long-term and sees the possibility of a breakout for the digital asset above $35,000 paving the way for a potential rally to $45,000.

The crypto complex is off $1.3 trillion from a May peak at around $2.5 trillion, according to CoinMarketCap.com.

Why is Bitcoin going down and why is crypto crashing right now?

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