The 2 reasons why the cryptocurrency market is falling.

joeljaimes1982 (70)Authorized Userin Steem Alliance • 3 months ago

Hello friends, I hope you are well, the countdown comes to an end and we finally enter the long-awaited month of April, the month of the fourth bitcoin halving. However, with just under 18 days left, institutional investors and bitcoin ETFs continue to be the main protagonists focused as much as possible on bitcoin.

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All of these are due to the possible explosion that could occur after the halving, causing the rest of the market to remain in the background, which is causing many altcoins to be very far from their historical highs and without having great growth to attract attention. of new investors rising in many cases less than what bitcoin has risen.

The color red returns to the market.

After a few days in which the price of bitcoin seemed to have established itself between 69,000 and 71,000 and after achieving the highest monthly close in history, accumulating for the first time the mark of 7 consecutive months in green.

In the month of April, it started in red, registering a considerable drop last Tuesday that has caused bitcoin to fall again at times below $65,000 and this, of course, dragged down the main altcoins.

An example of this is solana, which has fallen 10% from $210 to 180 in a few hours or others such as hedera, polkadot or cardano that have also suffered corrections close to that of solana.

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But what happened this?

As very important events approach the market, as occurred with the approval of ETFs or as has already happened on several occasions with the halving, volatility and unexpected movements usually begin to reach the market, causing investors' feelings to return to normal. flourish and causing the sale or purchase of many of them driven by fear or greed.

These events usually trigger a fairly significant increase in the volume of liquidations and in this case it has been no wonder, once again causing hundreds of millions of dollars in liquidations in open positions mainly in longs.

If we take into account the volume of liquidations that we have had so far this year with the explosive rises and falls of bitcoin, but leaving aside when it is on the side, there are several reasons that have helped us see a new decline.

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First of all, and one of the main protagonists has been Jerome Powell, who will give a new speech today around 6 in the afternoon, so possibly he has already been speaking while you read this post.

Jerome Powell's latest talks have always been accompanied by some tension and setbacks in the market and the most recent inflation data have not been positive at all and in many cases have been higher than expected.

So there is not much faith that Powell will announce good news regarding interest rates and there is even some fear that he could raise them a little more, a tough decision that is affecting the market quite a bit, making it difficult for investors to breathe easier. having a lower cost of money.

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Secondly, another of the causes of this fall has been GrayScale, which after slowing down the pace of sales at the end of last week, on Monday it once again registered a new forceful sale of bitcoin, which caused the market to turn red. and recording net sales of more than $85 million.

The good news to finish.

While GrayScale sells its bitcoin, both BlackRock and fidelity continue to accumulate with good purchase records, adding just over 200 million between them.

In conclusion

While large institutions sell their assets to obtain a large piece of the pie, other institutions buy to continue accumulating and the uncertainty that exists in the United States due to inflation that little by little eats up its economy, these two factors have caused a bit of panic. on the part of investors so we can see a roller coaster in the market these next few days.