The crypto market, dominated by Bitcoin (BTC) and Ethereum (ETH), faced another big sell-off this week, with the world’s largest cryptocurrency falling another 8%. Popular altcoins such as SHIB, ADA, and XRP also accompanied this decline. There are 5 main reasons why Bitcoin and other coins crashed. Details Cryptocoin. at com.
SHIB and others are down because of this
1. Inflation and interest rates. The Fed will potentially raise interest rates until March to discourage businesses, as well as individuals, from borrowing. As a result, trying to slow the economy and raise interest rates will make borrowing increasingly expensive, which will have a dampening effect on inflation.
2. Russian crypto ban. The second issue is Russia’s crypto ban, which was one of the biggest triggers of last week’s sales. The central bank of Russia has proposed banning the act of crypto mining, as well as the use of cryptocurrencies within the country.
3. geopolitical instability. Internet access in Kazakhstan was cut off during a political uprising. This is important because Kazakhstan was the second most important center for Bitcoin mining after the United States. We’ve had more tensions between Ukraine and Western countries, and this has had an impact on the Bitcoin price as well.
4. Correlation with Nasdaq. The next reason is the correlation with the Nasdaq. The correlation between Bitcoin and stocks hit a record high in November, and Bitcoin fell at a similar rate to the Nasdaq index. The Nasdaq has lost more than 10 percent since its highest level in November.
5. Bitcoin futures sales. This is the latest crash and, in turn, the last sale. After a very successful year, Bitcoin was bound to attract large groups of people, with many pouring their money into Bitcoin Future ETFs. But last Friday’s January 21 plunge liquidated over $1.1 billion in crypto futures.
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