In summary
- Crypto markets had a record weekend thanks to Bitcoin’s rise above $ 60,000
- However, almost all projects fell more than 3% on Monday morning trading.
- A number of factors are acting on the price of cryptography, including the alleged ban on cryptography in India.
Crypto had another wild weekend – how has it been the trend throughout 2021. In this last chapter, Bitcoin rose to new heights before aggressively reversing gains.
On Sunday, the world’s largest cryptocurrency hit its all-time high of $ 61,700, after an almost vertical price increase that started on Saturday morning, European time.
But then, on Monday morning, an almost identical-looking price drop caused prices to fall back to $ 50,000. The $ 3,000 drop represents a 4.9% drop in the last 24 hours, according to Nomics. For global market capitalization, which went from $ 1.82 trillion over the weekend, prices fell to $ 1.74 trillion, resulting in a loss of nearly $ 100 billion.
The movement came about at the same time that Coinbase, Bitcoin and Direct Deposit became trending topics on Twitter. This lost topic is a reference to some Americans receiving their stimulus checks as part of Joe Biden’s $ 1.9 trillion COVID-19 relief account.
If American citizens were buying Bitcoin at that time, it would be a great introduction to the turbulent world of cryptocurrencies.
The picture was no different for most of the world’s largest cryptocurrencies. Ethereum followed a trajectory similar to the rise and fall of Bitcoin, losing 4.1% in the last 24 hours.
In mid-caps – projects valued between $ 10 and $ 40 billion – a 4% loss meant that you were one of the lucky ones. Cardano, XRP, and Litecoin all fell 4%, while Chain link fell 5%, Uniswap fell 7% and Bitcoin Cash fell by more than 8%.
You will have to go to the edge of the top 20 to find all prices in the green. Hex and Algorand were up more than 9%, while VeChain was up 7.5%.
What makes markets so scared? Bitcoin and the broader crypto market tend to rise aggressively before quickly retreating. This can be attributed to several factors. The first is the entry and exit of exchanges.
Large HODLers can cause ripples in the market – which are then amplified by bots designed to execute trades depending on changing market conditions – whenever they move money in and out of exchanges.
Movements like the one above can be seen as a sign by others that it is time to stop price hikes, causing collective dumping on price-depressing assets.
Then there is the broader economic landscape and how it works with cryptographic prices. Asian stock markets had a difficult session today, as there are growing concerns that the Chinese government will have to intervene to keep the markets flowing, as the economy continues to grow.
In the US, treasury yields, those uncomfortable benchmarks that act as a thermometer for the economy in general, remained stubbornly high, adding fuel to the narrative that the US economy is overheating.
If that happens, inflation will rise, which could limit indebtedness, which could stifle a post-COVID recovery. All of this influences investor sentiment. The more pessimistic they are, the less likely they are to put money on exotic assets like Bitcoin.
Another unique factor in this specific cycle can be attributed to India’s turnaround in relation to Bitcoin holders.
The Indian government is supposedly planning to ban cryptocurrencies.
New reports on the ban reappeared after the country’s finance minister said recently that a “calibrated” position will be taken on cryptocurrencies.
India is the tenth largest market for Bitcoin trading volume, according to Statista, which means that measures like the ones above are likely to have a significant impact on prices.
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