Major digital assets in the cryptocurrency market are lower for the fourth day in a row on Wednesday after a 6-day on-off downtrend that tracked Wall Street’s decline overnight as a decline in the market raised fears of serious repercussions the recent negative developments underscores and continues to encourage a broad risk-off sentiment.
As previously reported, sell-offs remain massive as traders and speculators with heavily leveraged positions sell out amid concerns that falling prices will further accelerate the turnaround amid gloom and the prevailing negative outlook, leading to a long list of challenges Digital asset owner in over $ 2 trillion market.
At press time, Bitcoin (BTC) changed hands at $ 41,500, Ether (ETH) at $ 3,240, Ripple (XRP) at $ 1.51, Binance Coin (BNB) $ 501, Cardano ( ADA) at $ 1.94, Dogecoin (DOGE) for $ 0.44, ChainLink (Link) for $ 41, UniSwap (UNI) for $ 34, Polkadot (DOT) for $ 39 Dollars and Stellar (XML) for $ 0.62.
It wasn’t the best week of trading for most cryptocurrencies, which have been continuously depreciating since Saturday night. The ongoing sell-off due to the prevailing downtrend could see Bitcoin plummet further to $ 20,000-30,000 in the coming weeks.
A combination of factors ranging from Elon Musk’s tweet games, market overvaluation, profit-taking, seasonal investor promotions to China’s recent move to ban digital tokens as a means of payment have contributed to the market’s weakness and aversion to risk. China’s move could be followed by more countries in the near future, as several central banks recently raised concerns that the risky cryptocurrencies are viewed as a magical money generator.
A risk-free market means that sentiment will turn negative and traders and investors will begin to reduce their risk exposure and focus on protecting their capital.
China’s new ban, preventing individuals from holding cryptocurrencies, instructs institutions, including banks and online payment channels, not to offer cryptocurrency-related services to their customers.
Although the uptrend in cryptos had previously lost momentum, the dramatic decline in Bitcoin price began on Nov.
Such concerns about the energy consumption of cryptocurrencies are by no means limited to Elon Musk. There have long been concerns that, despite extensive self-praise and boasting by some, there are currently barely any environmentally friendly cryptocurrencies with significant market capitalization as the high cost in the decentralized ledger is actually required to keep malicious activity off a “trustworthy” network.
Additionally, there is general understanding and thought among long-term investors that most of the cryptocurrencies currently available are likely to fail because they may be digital assets, but they just don’t make good currency. We have explained it further here.
The real slowdown in the market dates back to early May when President Joe Biden’s capital gains tax (CGT) hike hit the news, sparking cautious market sentiment that eventually resulted in high sales volumes.
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