Why Is Crypto Down Today? Digital Currency Cools After a Brief Rally.

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Crypto


Investors wonder what happened to the crypto market after its two-day soar


In terms of the cryptocurrency market, investors have been on a rollercoaster in recent months. Over the period of a year, the environment of crypto investing has evolved dramatically. Coins reached all-time highs in 2021 before plummeting at a frightening rate. Bearish patterns have dominating as we approach 2022.


This week saw a flash, with currencies gaining significantly. While it appeared that things were improving, the market has resumed its downward trend. Why is cryptocurrency down today? Well, it appears that crypto has lost its tenacity from last year.


The last two trading days have been diametrically opposed to the first two months of the year. Bitcoin (BTC-USD), which had ebbed and flowed during that time period, ultimately registered considerable increases. Following a drop in the low-$30,000 mark in late February, its gains since Monday have taken it safely above $40,000.


As Bitcoin grew in popularity, so did the industry as a whole. Indeed, with a market capitalization of over $800 billion, Bitcoin is worth over half of the whole cryptocurrency industry. As a result, its success resulted in significant gains for other participants. Top gainers were Terra (LUNA-USD), which increased by more than 23% in a single day, and layer-1 network Avalanche (AVAX-USD), which increased by 17%.


Why Is Crypto Down Today? Bitcoin Sputters After a Brief Tear.


After such a difficult few weeks, investors have greeted the latest rebound in crypto prices with open arms. Unfortunately, things did not finish as quickly as many had thought.


In general, cryptocurrency appears to be losing stamina on its upward runs. With a few exceptions, coins and tokens are generally declining in value. Cosmos (ATOM-USD) and Internet Computer (ICP-USD), for example, are still trading in the green today.


There are several things at play here. One explanation is that cryptocurrencies have clearly not performed up to the 2021 benchmark; it will most likely take some time before the market experiences another consistent bull run as it experienced a few months ago. Another factor is that investors in general prefer less volatile investments. Indeed, while cryptocurrency has had a few great days, inflation concerns and the ongoing conflict between Russia and Ukraine are driving investors away from high-risk investments. Rather, the trend shows that these buyers are seeking refuge in stablecoin investments.


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