3 Reasons Behind The Crypto Market Crash – and Experts Forecast More Pain Ahead – Blog Digital Coin Price

3 Reasons Behind The Crypto Market Crash – and Experts Forecast More Pain Ahead – Blog Digital Coin Price

The cryptocurrency market is down, but some experts still have high hopes for the future of this digital asset class. The recent losses are just a blip on the radar and should not affect those who already invested in crypto.

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The “when crypto market will go up 2022” is a question that has been asked many times. The market was hit hard by the recent crash, and experts are predicting more pain ahead.

3 Reasons Behind The Crypto Market Crash – and Experts Forecast More Pain Ahead – Blog Digital Coin Price

For the last several months, crypto investors have been dealing with a tremendous downturn. Bitcoin’s price is $30,000 at the time of writing, down 40% from mid-November 2021.  

Crash of Bitcoin Although 2022 has been a pivotal year for Bitcoin and the whole crypto ecosystem, analysts and business professionals continue to forecast a Bitcoin price of $100,000. It’s fine, but what matters more is what comes next if it doesn’t. 

 

Bitcoin has fallen below $30,000, and the values of all major crypto markets are falling day by day.

Panic sellers and crypto whales have the potential to destabilize the cryptocurrency market.

Let’s look at what caused the crypto market to tumble.

 

The Crucial Point:

  • The loss of Bitcoin, Ethereum, Ada, Polkadot, and many other important and prominent cryptocurrencies has been a horrible start to the year 2022 for investors and traders.
  • Customer opinions, frauds, and fund news keep the market fluctuating throughout the day. 
  • The entire market capitalization has dropped to $1.16 trillion, a ten-month low.
  • Interest rate rises are causing investors and traders to return to conventional assets.

 

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After the Federal Reserve stated that it will battle inflation without raising interest rates on April 5, 2022, Bitcoin’s price dropped by 6% to $34,550, and it is still sliding.   

On the one hand, interest rates have risen. The crypto market, on the other hand, has been hammered—all of the main cryptocurrencies, including Bitcoin, Ethereum, Solana, MANA, and many more, are bleeding and testing the edge of a collapse. 

The global market capitalization fell 7.30 percent to $1.67 trillion. We could get an opportunity to meet a $35,000 area shortly. 

According to a market specialist who is researching the market, the market may approach the $29,000 support level before pumping in July. Since a result, we will see some greens in the market shortly, as markets may reverse swiftly.    

Bitcoin’s price has been fluctuating between $36,000 and $42,000 for many weeks, according to market watchers. Market volatility is being driven by inflation, geopolitical concerns, and Fed worries of tighter monetary policy. 

The Fed is scrambling to confront the 8.5 percent inflation rate in March, according to the most recent inflation data.

The overall market capitalization of cryptocurrency has plummeted to its lowest point in 10 months. Over the weekend, the market value fell to $1.62 trillion as an extra $130 billion left the market. It hit a low of $1.67 trillion earlier this month. 

Top prominent cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH) have been bleeding for eight months at the time of writing. Bitcoin has plummeted over 9.55 percent, and its current price is $30,150, while Ethereum (ETH) has dropped 7.65 percent to $2,419.  

Not merely the cyclical nature of crypto markets is to blame for the selloff.

 

3 Reasons Behind The Crypto Market Crash – and Experts Forecast More Pain Ahead – Blog Digital Coin Price

The Federal Reserve has raised interest rates.

The US Federal Reserve stated late Wednesday, May 4th, 2022, that short-term interest rates will be raised by 0.5 percent. Rates have risen the greatest since 2000. For the first time since 2018, interest rates jumped by 0.25 percentage point in March.   

It’s possible that the Fed may hike rates many times this year to keep inflation under control. 

 

Why did the Federal Reserve raise rates?

With its contractionary monetary policy, the US Federal Reserve aims to combat inflation by increasing short-term rates. The Federal Reserve aims to control inflation by lowering expenditure in the United States. 

Fewer individuals will buy items and services as a result of the FED’s decision. People will find it more difficult to borrow money for new purchases as interest rates increase, limiting their ability to spend.

 

 

Cryptocurrencies are being targeted in several nations.

Not all countries are satisfied with the use of bitcoin mining and blockchain, according to investors and market experts. To construct sophisticated mathematical equations that verify transaction blocks, it requires a lot of power and heavily loaded machines. 

Last year, China stepped in and barred financial institutions from doing crypto transactions, threatening to shut down mining operations and miners a month later. 

China isn’t the only nation dealing with these issues. More than a half-dozen nations have outlawed all crypto, including Egypt, Iraq, Algeria, and Bangladesh. Furthermore, the usage of cryptocurrency by financial institutions is prohibited in over thirty nations.

 

 

FOMO transactions are being decimated by meme currencies.

The bitcoin fall is also due to several famous meme tokens. 

Last year, investors and traders made a whopping 46,000,000 percent return on their Shiba Inu investments and a 3,500 percent return on their DogeCoin investments. The Shiba Inu dog breed was inspired by the Shiba Inu token. Fear of missing out fueled the rise of cryptocurrencies as a consequence of these large profits (FOMO). Another surprise is that Shiba and Doge were the most popular digital currencies in the United States in 2021. 

 

DogeCoin has lost more than 80% of its value since May 2022, while ShibeInu has lost about 75% of its value from its all-time high.

Despite the fact that SHIB and DOGE have huge virtual entertainment followings, the FOMO exchange has had a decent run. That’s terrible news for a resource class that relies on instinct and force to advance. 

As far as market experts can tell, Bitcoin’s future remains uncertain due to a variety of situations and methods that might play out. From 2022 through 2025, DigitalCoinPrice has predicted various possible outcomes for Bitcoin (BTC). We hope that our Bitcoin price research will help you make better decisions in the next years. 

Every friend is hoping for a $100,000 price increase for Bitcoin, and we all hope it will happen one day. If you still want to invest in Bitcoin (BTC) or any other popular cryptocurrency after reading this article, We recommend that you fund via the SIP method.

 

Our SIP Calculator will show you how to invest a modest amount each month rather than the whole amount.

 

The “cryptocurrency news” is the reason for the market crash. The cryptocurrency market has been hit hard, and experts are seeing more pain ahead.

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