Everything red – What’s going on in the crypto market?


The crypto market needs to be nimble and drops to a total market capitalization of 560 billion US dollars. It goes down for almost all coins in the double-digit range. Stand on the exact backgrounds can now be speculated only.

If that’s not a bear market, the entire cryptocurrency market turns deep red on Tuesday, with the 24-hour rate of change for each coin going from 10% to 30% in the negative range. The hardest hit with Ripple, Cardano, NEM and Stellar (ever -25% to -30%) just the boom coins of recent weeks. All of these cryptocurrencies have in common that they are supposedly cheap currencies that are to be purchased for an amount below or around the one-US dollar mark (keyword penny stocks).

The entire market falls considerably and can now only $ 560 billion on itself. This brings it to its lowest level since Christmas, when it came in the context of large profit making in view of the holidays to a fall in price. For the key currency Bitcoin, the nearly $ 12,000 that the cryptocurrency has dropped today is the lowest value in a month. However, it should not be forgotten that this brand reached a new all-time high one month ago.

Really obvious external shock triggers are unclear in the clarity in which it was partly possible in the past. However, there are a few clues that could possibly take us in the right direction. Yesterday at the American stock exchanges, for example, the usual payouts of bonuses to the brokers took place, which usually strongly influence the movements in the market in the following days. A look at CBOE’s and CME’s trading volume reveals that bitcoin futures have also been affected by heightened speculation. So it may be that large investors had set on a fall in the Bitcoin price to hedge or deliberately speculate on it. This principle is also called hedging in stock exchanges and enables profits to be realized both at rising and falling prices.

Another source of unrest could be China again. Apparently, the government there is planning to further restrict cryptocurrency trading, targeting private server access to centralized trading. Above all the market-strong institutional investors should be in the focus. More detailed steps have not yet been specified.

To what extent both events influence the currently highly nervous market can not be confirmed with complete certainty. However, it does reveal clues as to why this fall is likely to be temporary.

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