Cryptocurrency Crash: Bitcoin Under $ 26,000? | News

Cryptocurrencies dropped significantly over the weekend. Bitcoin fell below $ 27,000 and Ethereum broke key support to $ 1,400. Almost all altcoins are wiping out the gains that started in 2020 and continued until 2021, with Polygon, Kusama, Polkadot and Chainlink losing sharply, while bullish expectations were exaggerated just a few months ago. The “king of cryptocurrencies” has returned to levels around $ 25,000, unseen since the Luna crash panic. Given the weakening strength of demand, a stronger, more dynamic move south is likely to remain.

– Cryptocurrency sentiment deteriorated on Friday after alarming data from the US economy (record low investor sentiment according to University of Michigan data and higher than expected inflation rate). Bitcoin fell along with the US indices, once again showing a correlation. Investors fear a tightening Monetary policy by the Federal Reserve, to which alarming levels of inflation could lead bankers.

– The decline was compounded by the call option expiration on Friday, prompting traders expecting a recovery to close their positions. The move below key supports was also helped by the reversal of leveraged positions in the market.

– The Ethereum network is having problems. The developers of Ethereum announced on Friday another postponement of the transition to the long-announced version 2.0, and with it the date of the bomb of hardship that investors are waiting for. Traffic had a problem with identified errors on the Ropsten test network. Its task will be to persuade miners to stop extracting new ether and limit supply. Ethereum ultimately wants to introduce an organic “Proof of Rate” transaction approval model.

– Ethereum’s head of development, Tim Beiko, pointed out that the “merger” is likely to happen later this year, and the probability of rolling it back by 2023 is small at 1 in 10%. Beiko is concerned about developer overload and reduced performance, work on the introduction of version 2.0 In May, Vitalik Butern indicated September and October this year. due to the announced date in August.

– Investors’ concerns have been compounded by “depegging” sETH (implemented by ETH validators) against the ETH price. Ethereum tokens that affect betting will eventually be banned from the Ethereum network and after switching to version 2.0 and introducing “Proof of Work” to verify transactions online. Online wagering was also of interest to financial institutions, who were rewarded for approving transactions. As the price of Ethereum’s deployed tokens fell compared to Ethereum itself, the network exposes the technological shortcomings and risks of an apparently “secure” implementation.

– The Celsius network, one of the largest decentralized financial platforms and cryptocurrency lenders, has today suspended its withdrawal and transfer options. Investors are clearly afraid of a similar situation as in the case of Luna. One of the CryptoQuant analysts, Burac Tamak, in an interview with Bloomberg pointed out that the decline in the Celsius exchange rate is related to the awareness of the risk associated with a financial instrument similar to LUNA / UST. The cryptocurrency world is waiting for tight scrutiny from regulators researching high-yield cryptocurrency financial products for passive investment (similar to the Ancor protocol on the Luna network).

– Cryptocurrencies give up despite positive news about blockchain technology from famous financial figures such as Jack Dorsey and chess grandmaster Garry Kasparov. Edward Snowden also spoke over the weekend, with a positive view of the future of cryptocurrencies, but worried about their “financialisation” (profit orientation) at the expense of the technology that should form the basis of projects.

The beginning of the week brings sharp drops in the cryptocurrency market. Source: xStation 5

Bitcoin in the D1 chart. The largest cryptocurrency is currently fighting to maintain this year’s lows (12/05/2022). A drop below these levels could trigger an avalanche of hedge liquidations, potentially encouraging the bears to continue their downtrend. It is worth remembering that this week is fundamental from the point of view of the monetary policy of major central banks. On Wednesday, the FOMC will decide on rate hikes. Source: xStation 5

Ethereum on the D1 chart. The second largest cryptocurrency has suffered even more from the dynamic declines that have continued since Friday. ETH has broken below 2-year support and is currently struggling to maintain its $ 1,300 mark. The cryptocurrency has already dropped more than 70% from its peak. Source: xStation 5

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