When it comes to understanding the current volatility in the market of cryptocurrencies like Bitcoin, Cardano, SHIB, DOGE, there are several factors contributing to the bearish trend. So what’s next? cryptocoin.com We are giving the details as…
The market, which includes coins such as BTC, SHIB, ADA, faced volatility
First of all, Friday, January 21 was the last day of options expiration, which often resulted in significant volatility in the market. Given the amount of open futures contracts at the time, the significant price volatility that Bitcoin (BTC) initially experienced from Thursday evening to Friday was on the horizon. According to on-chain metrics platform Glassnode, “Futures markets remain a catalyst for short-term volatility at 250,000 BTC.”
Tensions between Russia and Ukraine
In addition, investors will wonder whether the tension between Ukraine and Russia will affect the price movements of the markets in general in the coming days. In addition, last week Russia’s central bank called for a complete ban on cryptocurrencies, recommending that the trading, mining and use of cryptocurrencies be illegal.
The report “Cryptocurrencies: Trends, Risks, Measures” states that cryptocurrencies provide an outlet for individuals to withdraw their money from the national economy because they risk weakening their currency and making it more difficult for the regulator to maintain optimal monetary policies. As a result, if both China and Russia decide to ban cryptocurrencies altogether, they will be two major economies whose citizens are not given the opportunity to enter this private sector.
Stock markets are also in the red
Equity markets elsewhere are also facing a downturn, as the Nasdaq shows; The Nasdaq closed the week in negative territory, down 2.72 percent on Friday after rebounding momentarily from the latest high, after a brief recovery earlier in the day. Interestingly, the current sentiment in the Nasdaq stock market is weaker than the crash that occurred in March 2020, when the coronavirus pandemic began to impact global markets.
Looking at the charts, it can be seen that the market is extremely bearish with the blue line representing the actual price action of the NASDAQ Composite and the red line reflecting the real fear and bearish trend in the market right now. Additionally, looking at the overall sentiment as assessed by the Hulbert Nasdaq Sentiment Index, it is interesting to note that the current data point is -70%. By contrast, the lowest was -60% in the March 2020 crash. “The bear trend has dropped to such an extreme that it supports a major stock market rally,” financial analyst Mark Hulbert said.
extreme fear in the markets
Combined with NASDAQ sentiment, the Bitcoin Fear and Greed Index stands at 13 points with the current price of $35,404 as of Saturday, Jan. However, it is thought that this indicator may drop as social media panic increases with the crypto market correction getting more mainstream media coverage at this stage. The fear and greed index is based on a variety of data points, including volatility, social media and Google trends, among other things, and information that enables an aggregated market sentiment assessment.
The value of the cryptocurrency market, including SHIB, BTC, DOGE, wiped out $ 350 billion in one day
Bitcoin and other cryptocurrencies have seen their values drop by hundreds of billions of dollars as the rapid decline in the cryptocurrency market continues to deepen. After a 12.02% drop the previous day, the crypto market cap stands at $1.62 trillion as of Saturday, January 22. As a result, the cryptocurrency market cap fell $356 billion from $1.98 trillion to $1.62 in a single day. This is the lowest level in 5 months.
The charts show that Bitcoin experienced the highest volume during the correction. Still, it can also be seen that the RSI is currently at its lowest point and is the most oversold on a daily basis since the actual crash in March 2020, with previous lows reached during moves in September 2019 and November 2018.
Saylor and Bukele continue their rise in Bitcoin
Meanwhile, this year’s decline in the crypto market is being scrutinized by MicroStrategy CEO Michael Saylor, who thinks there are a number of reasons. “I think there is a lot of dynamic here. “If you look at the entire crypto ecosystem, there are a number of regulatory uncertainties, particularly regulatory uncertainty regarding whether stablecoins and cryptos are securities,” he said.
Saylor says Bitcoin is now a “great entry point” for institutions, especially given the fact that famous investors like Bill Miller have recently allocated a significant percentage of their portfolios to the flagship cryptocurrency. Despite the drop in Bitcoin value, Michael Saylor has no intention of selling his company’s $5 billion stash. Likewise, Nayib Bukele, the president of El Salvador, declared that the country “received 410 Bitcoins for just $15 million.”
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