Why The Crypto Market Is Crashing

In the early hours of this morning, may 9th 2022, cryptocurrency investors – especially those who trade with eToro – woke up to a rather frightening reality as the global crypto market cap shrunk to $1.54 trillion, decreasing by a total of 2.28% in the last 24 hours, according to CoinMarketCap data on Monday (11.29 pm). 

Almost every top 10 crypto prices have decreased in the last 24 hours while the global cryptocurrency market volume over the last 24 hours increased by 3.19% to $94.96 billion. 

The total volume in DeFi was $11.39 billion, which is 11.39% of the total crypto market 24-hour volume. Stable coins volume was $87.56 billion, which is 90.3% of the total crypto market 24-hour volume. 

The Bitcoin price has also slumped to $33,628. Bitcoin’s dominance as top crypto asset remains unchanged over the last day at around 41.48%. The overall Bitcoin price has decreased  by 13.64% in the last 7 days. In the last 24 hours, the Bitcoin price decreased by about 2.25%.

What Experts Think?

Experts say that panic over inflation and fears of a potential recession are reasons behind the ongoing crypto market crash.  

Investors lose big time as new-age tech firms underperform. Darshan Bathija,  CEO and Co-Founder of Vauld, told FE Online that When the Fed Reserve announced that interest rates would rise by half a percentage point, Bitcoin saw a brief relief rally where the crypto touched $40,000. 

He went on to note that the sentiment did not last for long as market participants began panicking over inflation and a potential recession, resulting in equities and crypto markets plunging.

A sharp fall in market sentiment resulted in Bitcoin registering levels around $34,000, while ETH dropped to $2,527.

‘Extreme Fear’ And Current Cryptocurrency Prices

The fear and greed Index for crypto, which gauges market sentiment, stood at “extreme fear” at the moment.

In Bathija’s exact words, “The crypto markets have been moving in lock-step with the equities market, and what we’re seeing right now is investors treating Bitcoin as a risk-on asset. In light of fears of rising inflation, most investors have taken a risk-off approach – selling stocks and cryptos alike in order to cut down risk.”

Top Crypto Prices

Prices of several other top crypto assets have fallen sharply in the last few days. Take a look at how the prices moved in the last 24 hours according to BWCEvent cryptocurrency prices:

Ethereum (ETH): Ethereum price decreased by 3.41% to $2450 in the last 24 hours. In the last 7 days, ETH price has decreased by 14.15. It is currently ranked second largest crypto asset in terms of market capitalization.  

Binance (BNB): Binance coin’s price decreased by 3.13% to $347 in the last 24 hours. In the last 7 days, the BNB price has shrunk by 11.05%. It is currently ranked as fourth biggest crypto asset in terms of market capitalization.  

Solana (SOL): Solana price decreased by 13.41% to $74.91 in the last 24 hours. In the last 7 days, the SOL price has decreased by 16.73%. It is currently ranked as 7th biggest crypto asset in terms of market capitalization.   

Cryptocurrencies and other virtual digital assets are not very regulated right now in the world. Investing in them could lead to losses. Please consult your financial advisor before making any investment decision.