STOCKS TELEGRAPH

Tag: Market Crash

  • Bitcoin (BTC) data reveals hinderances for price recovery

    Bitcoin (BTC) data reveals hinderances for price recovery

    The market crash rocked and shocked the investment world. In a frenzy, last week the social volume of Bitcoin broke the record high in the 2017-18 bull run. The increasing mentions of Bitcoin on social media indicated a spike in interest which can be then translated into acceptance and adoption. However, as expected, the social volume of Bitcoin dropped to normal levels after the peak.

    The community chatter indicates a bearish bias in the market for Bitcoin – which may not be such a bad thing. Historical trends suggest that it is a highly bullish sentiment with high price levels that result in an increased consolidation period for cryptocurrencies. Thus, the price of Bitcoin and other cryptocurrencies may be expected to gradually recover over the course of the next few days.

    The social data from the sentiment analytics’ platform suggest that Bitcoin may be in undervalued conditions. A price recovery may be seen soon. In the derivatives market, the funding rate – fee paid for perpetual contracts – have hovered either neutral or negative. A negative funding rate means Bitcoin short traders are paying Bitcoin long traders – a bearish bias. The negative funding rate has also coincided with Bitcoin’s price recovery in the past.

    However, there are factors hindering the price recovery of Bitcoin as well. Bitcoin’s Daily Active Addresses (DAA) have stayed above 1 million for a while with the level becoming an unofficial threshold. Bitcoin’s Daily Active Addresses have stayed below the threshold level in the lower half of May.

    After a short-lived upward stint of Bitcoin, the movements of BTC whales have also disappeared. Since the ATH of Bitcoin, the holdings of 100-10k BTTC addresses have fallen drastically by nearly $4.14 billion. Moreover, Bitcoin moving to exchanges have also declined slightly.

  • Will cryptocurrencies cause the next financial crisis?

    Will cryptocurrencies cause the next financial crisis?

    Metalla Royalty & Streaming CEO Brett Heath certainly think so. The CEO has warned that cryptocurrencies will “lead the charge into the next financial crisis”. Metalla Royalty and Streaming is based in Canada and the company provides leveraged precious metal exposure through the acquisition of royalties and streams for investors. The company was founded in 1983 and has a net worth of nearly half a billion dollars.

    The CEO of the company, while speaking to Kitco News, compared cryptocurrencies to the internet bubble of 2000 and the housing bubble of 2008. Per the CEO cryptocurrencies are nothing more than the next bubble in the timeline. Delving deeper into the historical financial crisis, Brett Heath pointed out the common thread of all the crashes was mass adoption of a new financial products – which is exactly what is happening with cryptocurrencies.

    Brett Heath questioned the liquidity that had been injected in the crypto market since 2020. Heath drew comparison with the total liquid money supply of the United States which increased nearly four time while the cryptocurrencies’ market capitalization went up tenfold. The CEO has shown concerns for the heavy inflow of money into the market which has “no intrinsic value”. It is no secret that cryptocurrencies are highly speculative assets and run of the belief of investors and traders. Although a paradigm shift has been observed with altcoin offering real value gaining prominence. Nonetheless, that did not pacify the CEO.

    Heath was also not impressed with the bullish price predictions of Bitcoin neither was Bitcoin’s limited supply of any value to him. The CEO pointed out towards altcoins citing some have better technology, offering and privacy and yet they are valued nowhere near Bitcoin.

  • NFT market thriving amidst crypto crash

    NFT market thriving amidst crypto crash

    As the cryptocurrency market boomed during the beginning of the year and subsequently, a newer segment also rose to prominence – NFTs. Non-fungible tokens cannot be interchanged for something else – unlike fungible assets like money. NFTs have exploded alongside the cryptocurrency market as they have become a medium for collectibles and artworks. NFTs represent collectables or artworks and often sell in as high as millions of dollars but the buyer will not receive any tangible asset; instead, they will receive a digital token representing the said asset. In essence, NFTs are digital certificates of ownership.

    While the cryptocurrency market crashed, the NFT market was thriving, a report by DappRadar revealed. The decentralized app marketplace reported that NFT sales have risen nearly 300% from January to May. The sales averaged at 21,815 per day in January while the sales stand at 82,373 in May. The sales began surging even more as the cryptocurrency market crashed.

    However, the value of sales have taken a hit amidst the market crash. During the beginning of May, daily sales averaged at a value of $14.9 million but the figure drastically dropped to $6 million per day as the crypto market plummeted.

    However, the NFT market is regarded as nothing but a bubble. There have been quite a few sceptics of NFT technology and the idea of buying just an ownership certificate which also, oftentimes, does not give copyright ownership has been called downright absurd. There are two sides of the story and where critics believe NFTs to be nothing but a money-hoarding scam, others do believe in the technology and how it has the potential to become the future in a digitized world.

  • Is the market crash the downfall of Bitcoin?

    Is the market crash the downfall of Bitcoin?

    The cryptocurrency market crashed brutally. It all started when Tesla denounced the use of Bitcoin as a mode of payment for electric cars. The CEO Elon Musk had been a strong advocate of cryptocurrencies so the sharp turn in his stance resulted in bearish divergence in the market. The crash had been further fueled by a Chinese financial committee’s report which said to launch a crackdown on cryptocurrency mining. The crypto market took another hard hit after the news as China is accountable for a good proportion of Bitcoin mining.

    However, is the crash really bad for the cryptocurrency market? The bull run had bought the cryptocurrencies and blockchain technology under the limelight. Corporate behemoths, governments, small retailers, and innovative startups have all accepted the technology because of its many use cases.

    Sentiment data from a report published by Santiment.com – a sentiment data analytics platform –reveals that the crash may not be as bad for the acceptance of cryptocurrencies worldwide. The weekly report revealed that interest in cryptocurrencies had been increasing.

    The social volume of Bitcoin had shot up drastically in the bear market. Interestingly, the social volume also exceeded the record high of the 2017 bull run. The data indicates growth in the cryptocurrency sphere. Mentions of the “bear market” had also increased drastically – which is to be expected.

    Despite the bearish outlook of the market, the general sentiment for Bitcoin had stayed positive. With the “buy the dip” mantra, investors are positive that Bitcoin and other cryptocurrencies will eventually pick back up. It is also the positive sentiment that usually leads to crashes as the market becomes overheated and fear of corrections overtake. Bitcoin did see a shift in sentiment to the negative side after the Chinese Financial Committees report.

  • Cryptocurrency exchanges not ready for the market?

    Cryptocurrency exchanges not ready for the market?

    The cryptocurrency market had crashed amidst environmental concerns. The market crash has bought a lot of Hodlers as well as panic sellers. The market capitalization of cryptocurrencies fell from above $2 trillion to $1.78 trillion. The past week had seen unparallel volatility with the market flooded by buyers and sellers.

    Binance, the world’s largest crypto exchange, had temporarily suspended Ethereum (ETH) withdrawals from the exchange as the orders kept piling up. Coinbase, another major crypto exchange, had also been suffering from downtimes. Binance had also been cited to freeze users’ accounts for prolonged periods of time and without citing any solid reason.

    Two of the major cryptocurrency exchanges have not been able to handle the large traffic in the crypto market – with others struggling as well. Both exchanges have commented on working towards resolving the issues but is the market not ready for cryptocurrency adoption yet?

    Bitcoin’s Proof of Work (PoW) mechanism had been under a lot of debate. Various researches have pointed out towards the exorbitantly high energy consumption of cryptocurrencies operating with the PoW staking mechanism. However, it was not until Elon Musk that the cryptocurrency sphere took the matter seriously.

    Elon Musk’s Tesla had earlier announced to accept Bitcoin as a mode of payment but the billionaire CEO announced that Tesla is ceasing the acceptance of Bitcoin as a payment method. The announcement caused an uproar in the market which led to a brutal market crash. At the time of writing, the king of cryptocurrencies is down by nearly 20% in the weekly window. As the market shows some reversal, whether or not the leading exchanges are ready for the behemoth cryptocurrency industry is set to become is under debate.