It was cruel summer for the BTC market
Let’s start by agreeing that summer goes from the beginning of June to the end of August. When you look at Bitcoin’s last two monthly candles, the one for July is green, and the one for August is red. If you are wondering about bitcoin trading visit Quantum Code.
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In this case, the bitcoin price started July at $19.9K, fell to around $18.8K during the month, peaked at around $24.7K, and ended the month at around $23.3K. After that, it started in August at $23.3K, dropped to $19.6K, went up to $25.2K, and then settled back to around $20.0K.
You could say that bitcoin is on vacation for the summer if it weren’t for June. Since it was first traded in June for about $31.8K, the price of bitcoin dropped by almost 33% over the summer. The idea that “nothing happens in finance in the summer” can be tested by comparing bitcoin’s summer to the S&P 500, which has lost 4.3% since June.
When you look at these summers, you can see a strange pattern: Bitcoin hasn’t had a negative value since 2018, and the S&P 500 hasn’t since 2015.
Why is the market for cryptocurrencies going down?
Bitcoin and other cryptocurrencies are losing value right now for both short-term and long-term reasons, such as the general state of the financial markets and the failure of a major stablecoin.
Because the Federal Reserve of the United States promised to cut the country’s $9 trillion debt, investors and institutions have pulled back from the market.
The writer says, “Since stock and commodity markets worldwide are falling, so are cryptocurrency markets.” It’s possible that this will only last a short time as a trend.
Stablecoin: One of the main reasons the market keeps going down is the mess with Stablecoin right now. The value of UST (Terra USD) dropped by more than 80% because of the algorithmic Stablecoin de-pegging disaster that happened on Wednesday.
The Terra ecosystem only works if people use UST as a stablecoin, so the LUNA token and UST are linked in a way that can’t be broken. When the United States Treasury System (UST) lost its dollar peg recently, it sent shockwaves through the cryptocurrency market because it showed how fragile algorithm-backed stablecoins are.
The macro-market volatility caused more liquidations yesterday, and UST fell to a low of $0.60. In the last few years, it had never been worse. The founder of the crypto tax agency Catax, Gaurav Mehta, said, “This led to one of the biggest price drops in LUNA’s history and effects.” This caused a lot of people to sell their LUNA, which caused one of the biggest price drops in LUNA’s history.
According to data from Coinmarketcap.com, the value of Bitcoin has dropped 19.9% in the last week. During the same period, the price of BNB fell by 5.73 per cent, and the price of Ethereum fell by 16.75 per cent.
Also, the price of an asset depends on how many new investors want to buy it. Institutional investors are taking a “wait and see” approach to see if what the government says will lead to big changes. This is because there are signs of regulation, and the central bank has said it will start issuing its digital currency (CBDC).
This is because a lot of investors seem to be hedging their bets in case the stock market everywhere in the world crashes. This means they are more likely to invest in safe assets than high-risk assets with high returns, like cryptocurrency.