WHY THE CRYPTO DIP?
Disclaimer: The views and opinions expressed in this article are those of the author.
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The crypto currency market has been bear for some months now. In the early hours of today, BTC dropped to $29,000 US Dollars. Several reasons could account for this. I've researched and put together a list of reasons why the crypto dip as follows:
The Russian Ukraine War: War has always being both a blessing and a curse. A blessing to the victors and a curse to the vanquished. In this case, even though the Russia-Ukraine war has led to great usage of cryptocurrency by both Ukrainian and Russian Governments, the market has remained bear. This is not far fetched as a great part of the economies of these nations as well as their supporters have been tampered with. When there is economic disruption, less wealth is generated and hence low cash flow. This explains why there is lesser circulation of the cryptocurrency and hence the bear market.
Correlation of Stock Market with Crypto Market: While the tech stock are crashing down, the cryptocurrency market is experiencing the dip at same time. This connotes a correlation between the tech stoke and the crypto market. Within the same period when the S&P 500 dropped 2.5% and the NASDAQ 100 dropped 3.5%, Bitcoin fell 15%, from $36,000 to trade around $30,700 at press time.
The Impending Economic Recession in America: There is an impending economic recession in the United States. Inflation has been on a constant rise since the beginning of this year. Wall Street have measured the expected volatility in the stock market to have risen more than 80 percent this year.
Chinese Government Ban on Crypto: Early this year China Government brought a complete halt to Bitcoin mining in its Sichuan province. Furthermore, the government told banks to stop supporting crypto transactions. This was what led to the first crypto dip this year.
In conclusion, the crypto market is experiencing a hard time. Hard times don't last forever, however, wisdom is required is such times. Discretion must therefore be exercised in any crypto trade one may be involved in. It is also a good time to buy as buying the dip and selling at the bull is often the best strategy in crypto trading.
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