The price of BTC has dropped to a new low – just below $30,000 – after $1 billion in liquidations occurred on May 10 at 11 pm UTC. Such a large number of liquidations can trigger a chain reaction, lowering prices. Another prominent feature of the crypto market is the overreliance on stable coins. In particular, the TUSD (TerraUSD) appears to have been a significant culprit in the days before the May 10 dip.
The rise of stablecoins in the crypto world has been accompanied by some concerns. Most notably, the Federal Reserve’s biannual Financial Stability Report highlighted the risks associated with the rise of unstable coins, highlighting the risk of runs on money market funds and other illiquid assets. But despite this, some cryptocurrency enthusiasts continue to back the decentralized digital currency. Despite concerns, stablecoins have remained relatively stable, if not growing, in recent weeks.
While there has been a lot of concern about the stability of TerraUSD, its mastermind, Do Kwon, has tried to ease investor concerns through his Twitter feed and has postulated a recovery plan. The crypto-token had dropped to 92 cents by 2:30 pm ET on Monday and subsequently stabilized for several hours. However, at around 6:15 pm ET, the value of TerraUSD deteriorated quickly, falling to 65 cents.
Several significant investors are being forced to decide whether to bail out TerraUSD. Since the crash, the billionaire founder of Galaxy Digital, Michael Novogratz, has remained silent. His Twitter profile has not posted anything since May 8.
Despite the failure of LUNA, the number of investors increased by 50% in just two days. As of May 15, the total number of Luna investors stood at 280,000, up from just 350 million at the beginning of May. While most of the buyers were domestic speculators, some foreign investors also purchased the coin. However, the price of LUNA is yet to break above its daily EMA eight. The recovery plan for LUNA will depend on the overall recovery of the crypto market.
At the end of April, LUNA was worth nearly $100 and is now trading for less than a cent. But some speculators are betting on a miracle recovery of the cryptocurrency. Some believe crypto is too big to fail and will eventually surpass Gold’s value. One hopeful investor recently wrote on South Korea’s internet platform Naver that he had bought over 300,000 LUNA over the weekend for $0.33 each.
Despite its recent performance, LUNA is far from a surefire winner. The cryptocurrency market is struggling to recover from the collapse of UST and luna stable coins. The collapse of UST and luna, two algorithms tied to the terra blockchain, has caused significant volatility. The recent collapse of both currencies has raised questions about the viability of stablecoins. Politicians and regulators have begun to take notice of these problems. However, the company behind UST is developing a new blockchain that will not include a stable coin.
In the last 24 hours, BITCOIN’s crypto market recovered by almost two percent. However, the daily Bitcoin gold-tether volume bar has been at its highest since June 2021. Solana’s decentralized exchange saw a three percent increase, and the BinanceUSD stablecoin is down 0.07 percent and trading at $1. Among the most valuable tokens, Doge is worth about $1. However, investors should only invest as much as they are willing to lose and keep their other financial priorities before investing in the crypto market.
The recent crypto price drop may have been a chance for some neophytes to buy into the cryptocurrencies, as they are part of the decentralized finance movement. While this movement has a strong future, it does have its issues. Many of its currencies are backed by companies that have lost money in scams. For example, a significant Bitcoin exchange hack in China led to the loss of millions of dollars for investors.
Despite a few minor gains on Friday, the cryptocurrency market has reacted with heightened fear due to the escalating war between Ukraine and Russia. As of Friday afternoon, Bitcoin was trading at $39,844 in New York time, down 5.4% in the past 24 hours. Investors are concerned about escalating conflict between the two countries and the global recession risk. Meanwhile, the second-largest cryptocurrency by market cap, Ethereum, had fallen by almost 24% over the past 24 hours.
The recent price drop has been the leading cause of the decline in Dogecoin. The cryptocurrency is the number one meme coin, but the price has fallen below its previous highs for a few days. Elon Musk has been a critical player in the price action of Dogecoin, and he has promoted its adoption and use. Even Tesla accepts Dogecoin as payment for merchandise. Although Bitcoin and Ethereum have a more prestigious reputation and are considered blue chip cryptocurrencies, their prices are often out of reach for the average investor, and the fees are minimal.
The recent plunge in Dogecoin has created a massive opportunity for long-term investors. The cryptocurrency fell almost 7% in a day but has since stabilized. As of March 25, the coin’s price is up by 0.61%. As of this writing, it is trading around $0.13449 and slightly above its 50-day MA. However, the coin might return to the $0.126 support level in the coming days.
During February and March, the cryptocurrency market saw strong growth. One of the most prominent players was Dogecoin, and the price rose by as much as 33%. However, it slumped to a low of $0.17 on April 25. At press time, Dogecoin is trading at $0.18. This is still down from its previous high of $0.27. This is still a significant loss considering the underlying price of the currency.
After a rough couple of weeks, the price of Ethereum is back up above $2,100. However, cryptocurrency has been undergoing problems lately, including scalability. Lately, layer two challengers have reported more NFTs than on Bitcoin. This suggests that a recovery isn’t quite yet in sight. Still, some experts are bullish on Ethereum, saying it could hit $12,000 this year.
The cryptocurrency market is experiencing volatility and declines in price due to several reasons, including recent regulatory actions, geopolitical concerns, and inflationary concerns. According to EarthID’s Sharat Chandra, Ethereum’s price has continued to drop and is stuck in a narrow range between $1,800 and $2,700. Ethereum’s market cap is the second largest cryptocurrency by market cap, but its prices have been on a downward spiral for more than a year.
Although cryptocurrency has experienced extreme volatility in the past, the current slump in value is still mild compared to the turbulence that has plagued the sector. Many individual cryptocurrencies have experienced more than 80% of their value on multiple occasions, and the average return on these cryptocurrencies has remained positive. One notable exception to this trend is Ethereum, which suffered a 95% drop in 2018 but has since rebounded. While the current slump in cryptocurrency prices seems to be more extreme than most, there is a history of turbulence in the crypto market, and the current one appears to be a temporary dip.
The latest development in the Ethereum blockchain has also made the project’s security and anonymity more robust. Developers expect further tweaks to increase the security of the network. They plan to incorporate anonymity features and leverage the Verifiable Delay Function to secure the randomness of validator assignments. These updates have made Ethereum a desirable option for many aspiring cryptocurrency developers.
The Ethereum cryptocurrency has suffered from volatility in the past week. The price of Ether, launched by Vitalik Buterin, has plummeted from $2,600 to as low as $2,585. Friday’s dip to under $2,800 marks a loss of about five percent. Ethereum works on a different software network than Bitcoin, enabling developers to build new tools and NFTs.
However, the cryptocurrency market is notoriously volatile. A significant drop in the cryptocurrency market wouldn’t significantly impact the stability or creditworthiness of the banks we rate. The price of Ether’s crypto rivals is expected to rise by 20 percent in the next few months. As such, it’s important to monitor price fluctuations carefully. However, it’s also essential to remember that a decline in Ether’s price does not necessarily mean the end of the crypto market. It’s an excellent time to look for alternative investments.
With the emergence of Ethereum, Ether has the potential to be a viable alternative to bitcoin. Currently, the Ethereum network has a market capitalization of $1.25 trillion, but that amount could change rapidly. The recent crash in Bitcoin, Ethereum, and other cryptocurrencies has led to massive liquidations. Since the nadir, traders have added about $135 billion to the crypto market’s value.