As is often the case in crypto, we saw some severe price drops recently. But why did this happen?
The cryptocurrency market, previously projecting a bullish trend, has recently encountered some tumultuous market fluctuations. These have prompted the prices of major cryptos to sink below the line.
Across the past seven days, every cryptocurrency in the top 10 (except Dogecoin) has decreased in value. Solana and Polkadot saw the largest drops of 12.6% and 13.4%. Bitcoin and Ethereum are also down 4.6% and 10.1 in the last week.
Why Are Crypto Prices Declining?
One of the key reasons driving the crypto price decline is the recent incident involving Chinese companies Evergrande and Kaisa. These companies failed to make their scheduled US dollar bond payments, which have been affecting the prices of cryptocurrencies over fears of a financial crisis.
Other factors also include uncertainty created by the Covid-19 Omicron variant hitting the global price economy. While many in the cryptocurrency space see their investments as separate from the traditional stock market, large events such as these still can impact their prices.
It also appears that the regulatory concerns regarding cryptocurrencies in the US and abroad have also been influencing the prices of cryptocurrencies, prompting the prices to take a deep plunge. Critical concerns such as Fed tapering are also driving the prices of crypto to shrink on global finance indexes.
Of course, if you use Coinbase or CoinMarketCap, you may have seen some pretty odd prices over the last day. This was due to a glitch in their price tracking. The platforms have since fixed the issues, but for a while, some price graphs looked like this...
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