Why is crypto on a decline?

Why is crypto on a decline?

A mammoth of a question prying in the minds of crypto enthusiasts is, ‘why is crypto falling?’ A couple of weeks ago, the global crypto market was down to USD 1.23 trillion, nearly every top crypto token in the red.

One reason is a low-risk appetite, especially post the Terra (Luna) fiasco.

Cryptocurrency markets have been undergoing a choppy phase over the past few weeks. Bitcoin has plateaued around USD 30000, and Ether oscillates between USD 1700 to USD 1800.

Charles Tan, CEO at Atato, cites the below reasons. First is the decision by European banks to hike interest rates. Another aspect was the 26 per cent decline in the total crypto volume. The reason for this is selling pressure.

Central banks could be a catalyst to this as well. If the interest rates continue to get hiked, there is a high chance of a deeper sell-off in the crypto market.

A research team said that Bitcoin and Ethereum decline, and the rise with the US Treasury yields. However, the difference is in the outlook – positive! The decline can get interpreted as a result of marginal seller exhaustion and a gradual easing of regulations.

A significant amount of institutional capital is poured into crypto. The second half of 2022 is deemed to be optimistic on crypto. This rides on the Web 3.0 adoption and technology evolution.

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