It’s more than a week since the crypto market witnessed its first crash since 2017-2018. In fact, the mainstream media managed to freak out people ever since 2020 when the Crypto Market was still at its bottom, making them sell their cryptos every time a small correction happened. Today, on the other hand, it is confirmed. The crypto market did in fact crash, and it did so hard. In a previous article, we wrote about 3 reasons why the cryptocurrency market was crashing. Many things happened ever since, that made this crash extend till today, so let’s see why is the crypto market still crashing.
3- China issues NEW warnings against Cryptos
This in fact isn’t something new. Every year or so, China and other countries issue warnings, letting people freak out and sell their crypto holdings. This usually happens every time there’s a new crypto uptrend, and many people jump on the crypto train. Governments don’t like to see that people’s money is not in their control. That’s why they issue new warnings and regulations that scare people, hence letting them dump their holdings or even their gains. This “dump” is a pure snowball effect, that leads to further FUD in the market, hence a crashing crypto market.
2- BlockFi’s mistake had severe consequences
A few days ago, a major crypto exchange and trading platform called BlockFi made a bonus for their customers. The exchange decided to send their customers USD cash money if they participated in a trading promotion from back in March. The company instead sent its customers BTC. For example, if a client was to be paid 50$, the company sent him 50 BTC.
Although you might be thinking that this is a good thing and more people would be interested in the crypto sphere due to such “errors”, but the big players become more strict when it comes to payouts. This in turn will lessen the traded volumes of Cryptos, resulting in lower demand, hence a lower price.
The company’s website was even seen DOWN and people can’t access their funds. This will definitely create fear, and more people will be pressured to liquidate their holdings asap.
1- Many problems occurring on the Binance Smart Chain
Investors and users of many DApps that integrate on the BSC network saw many irregular outages lately. Many users had problems accessing/using their respective DApp. This created fear among many crypto enthusiasts, especially among the ones who like Binance as a company and vision. They saw how the infrastructure was still in its infancy, and many decided to leave Binance’s ecosystem.
The Binance Coin (BNB) saw also a huge fall in its prices, and the coin fell from being the third biggest crypto by market cap to becoming #6 on the list. ADA, DOGE, and USDT managed to surpass BNB, although those coins also lost around half of their market cap (except the stablecoin USDT, where people most of the time revert to this token to hedge price fluctuations).
We’re not saying that THIS is the only reason why the crypto market is crashing, but rather a combination of all the above and the previous reasons. Technicals and market sentiments also play a major role in determining the general market trend, so for now, markets are crashing still…But remember, after the rain comes the rainbow (aka, buy time).
Stay Ahead, Stay Connected
Rudy Fares