Cryptocurrency futures under pressure and investor concerns persist
- This week, the cryptocurrency market sector has fallen significantly due to deteriorating investor sentiment.
- The decline was driven by factors such as recent SEC lawsuits and concerns that liquidity will become scarce.
- The progress made by the cryptocurrency market since the beginning of the year is starting to reverse.
Futures for Bitcoin and Ethereum and a slew of other major cryptocurrencies plummeted this week as inflation and lawsuits faced by Binance and Coinbase weighed heavily on investor sentiment. However, towards the end of the week, investors began to feel somewhat more positive. This week, the price of MBT and MET futures fell by 1.3% and 4.5% respectively, with many alternative coins falling significantly more. The total market capitalization of the crypto sector has fallen by 6% over the past week, and now its value is hovering at the border of less than $1 trillion.
The combination of macro headwinds and the resumption of regulatory action appears to have put the crypto bears back in action and liquidity has started to dry up. Bitcoin, an indicator of the health of the crypto sector, is currently trading at around $25,576, with some analysts suggesting that BTC’s price could soon be somewhere in the $23,500 range.
The tokens that were named securities in the SEC lawsuit against Binance and Coinbase , including Cardano (ADA) and Solana (SOL), have been hit the hardest, down 30% and 28.5% since the start of the month, respectively. And after a promising start to the year for the crypto sector, the macroeconomic trend is starting to shift in the other direction. Investors will be wondering if this can be considered a roadblock or a performance indicator for the sector for the rest of the year.
About Bitcoin
Bitcoin is the original decentralized digital currency invented in 2008 by an unknown person or group of people named Satoshi Nakamoto. It runs on a decentralized peer-to-peer network, which means that transactions can take place directly between users without the need for intermediaries like banks. Bitcoin uses cryptography to secure transactions and control the creation of new units of currency. Transactions are recorded on a public ledger called a blockchain, which allows anyone to verify the validity of the transaction and ownership of bitcoins. The total supply of bitcoins is capped at 21 million, which is expected to be reached around 2140. The price of bitcoin is very volatile and it has experienced numerous boom and bust cycles over the years.