After a strong surge in 2021, investors have seen sharp profit booking in 2022, which has not been a healthy year for crypto assets. On June 13, 2022, Bitcoin, the cryptocurrency with the most significant market capitalization, closed at about Rs 17.55 lakh, its lowest level since December 2020, on growing fears of a US recession and rising interest rates.
“The crypto markets are in shambles, and the community is in dire straits.” “It’s chaos,” says Kunal Jagdale, the founder and CEO of BitsAir Exchange. Bears are wreaking havoc, and crypto investors have nowhere to turn now that Bitcoin has taken a hit.
“The market as a whole has dropped. “All one has to do is hold and sit tight,” explains DSK Legal Partner Rishi Anand.
Let’s have a look at the reasons for the price drop as well as investment options for existing and new crypto investors in today’s market.
Factors That Cause A Price Drop
Bitcoin, Ethereum, and other cryptocurrencies fell on June 13 (see graph) after data released on Friday showed US retail inflation unexpectedly rising to a new four-decade high, reigniting fears of more Fed rate hikes that might stifle economic development.
As reported by Moneycontrol, To prevent growing inflation, governments around the world are working hard. Rising interest rates, as well as a drop in the S& P 500, Dow Jones Industrial Average, NASDAQ Composite Index, US tech companies, and commodities (gold and silver), have prompted crypto investors to change their positions. “Another important factor for the crypto selloff was Terra’s LUNA disaster, which added to investors’ misery, as well as strong institutional selling,” says Jagdale.
“Cryptocurrencies have fallen sharply due to increased volatility and lower market size. “However, there is likely to be strong support for bitcoin at roughly $18,000,” says Sidharth Sogani, CEO of CREBACO Global. If the bitcoin price falls below $20,000, Jagdale warns, things could turn ugly, and investors should prepare for catastrophic price action.
If your crypto portfolio is down drastically, but you don’t need the money, crypto aficionados advise holding. Don’t be alarmed by the present price drop.
“If you need money or are uncomfortable, consider selling half of your portfolio to get cash. “We’re also partially invested in the current market,” adds Naimish Sanghvi, CEO of Coin Crunch India.
