WMA: FUD Takes Control as Bitcoin Crashes The Market Cap Drops by nearly $1T
Get the weekly summary of cryptocurrency market trends, news, and forecasts!
This Week’s Summary
- The Crypto Market ends the week at a total market capitalization of $1,413 trillion.
- Bitcoin is down by 30% after another public bashing from Elon Musk and China regulators.
- Ethereum lost almost 47% of its value over the past seven days.
- XRP is down by 50% and is now trading again below $1.
- Binance Coin, Polkadot, and many other altcoins are down by 50%.
- The DeFi sector lost almost $30 billion in total value protocols (TVL).
Crypto Trends 17th – 23rd of May 2021: PERFORMANCE & ANALYSIS
The cryptocurrency market is ending one of the worst weeks in its history. The bulls were nowhere to be found as a fiery debate on Twitter fuelled by no other than Elon Musk was enough to cause a massive bloodbath. More so, the Chinese regulators “chose” the perfect time to reiterate an old ban on banks preventing them from working with crypto exchanges.
All in all, it was a week marked by Fear, Uncertainty, and Doubt (FUD). And, the results are easy to see in the exponential losses that almost every crypto asset endured. Additionally, the overall market capitalization dropped by $891 billion, and it now stands at $1,413.
Bitcoin has been bleeding massively for a couple of weeks now. However, the biggest blow to its dominance came on the 19th of May 2021, always remembered as Black Wednesday for the crypto market.
The primary cryptocurrency started the week trading at around $46,000 and showing promising signs of an upturn. Unfortunately, every last drop of optimism vanished into thin air on Wednesday. After a long and fierce debate on Twitter between Elon Musk and the crypto community, the CEO of Tesla bashed BTC for allegedly being highly centralized.
Additional support for Dogecoin and more venom towards Bitcoin took the latter on a downward spiral. During the biggest correction in the most recent bull run, Bitcoin dropped as low as $30,000. Meanwhile, the entire market came crashing down as altcoins started losing a great chunk of investors’ support by the hour.
All the FUD in the market received a surprising boost from the Chinese regulators. On Wednesday, the China Banking Association, the National Internet Finance Association of China, and the Clearing Association of China released a joint statement. In it, they reiterated their 2017 ban for Chinese banks to service crypto exchanges, traders, and investors.
The timing was perfect! The market didn’t have a chance to recover. More so, casual investors started selling abruptly to recover at least a fraction of their investments. As a result, the entire market cap dropped by nearly 1$ trillion. Even Bitcoin saw its market capitalization lose more than $300 billion in the process.
Bitcoin is now trading at around $35,000, which means that it lost almost $23,000 in the past two weeks. It’s not the best of times for BTC at the moment, and “HODL” is the last cry of resistance from early investors.
Ethereum was trading at around $4,300 a little over ten days ago. At the time of this writing, it is struggling to stay above the $2,000 resistance level. It’s been a rough week for all the altcoins, and Ethereum’s devolution shows it best.
Ethereum managed to set one weekly ATH after another in the past two months. Now, it seems almost all its hard-earned gains liquidating with every passing hour. Following a 47% loss in the past seven days, Ethereum is trading at around $2,160. Its bearish evolution could see it soon landing on the nearest support at $1,860.
After several weeks of trading above $1.5, Ripple’s XRP is again swimming in more familiar waters below the $1 level. It seemed that XRP could finally reclaim its 3rd place in the Top-10 crypto table by market cap only ten days ago. Now, it is almost exciting. And, it could have very well been out if the other altcoins wouldn’t be performing just as badly. XRP is trading now at around $0.79.
The rest of the altcoins also had a horrible week, and almost none escaped bear territory. For instance, Litecoin is down by 55%, Chainlink lost more than 58% of its value, and Cardano lost most of its recent gains after a 45% value drop.
What’s in the News?
- VitalikButerin, the co-founder of Ethereum, believes cryptocurrency is a bubble, but not a toy depending on Elon Musk’s tweets for survival.
- The United States Treasury and IRS are calling for stricter control of crypto investments in the US and could ask investors to report crypto transactions exceeding $10,000.
Next Week’s Market Forecast
Bitcoin is down by more than 50% from the ATH it set over 5 weeks ago. Its drop is holding all the headlines, and rightly so. Moreover, it brings more credibility to crypto skeptics, who see cryptocurrency investments as gambling.
At the moment, we don’t know if the crash will continue. However, there is a glimmer of hope for those predicting the market’s revival. For instance, Bitcoin lost nearly 87% of its value in 2013. Four years later, it dropped by 84% and again by 56% when the COVID-19 pandemic broke out in March 2020. Above all, it recovered every single time setting new ATH’s on long and fruitful bull runs.
In conclusion, Bitcoin and the crypto market are more likely to recover than to plummet into obscurity. When? It’s too early to tell. But, if you were looking for an entry point, then buying the dip now could be a smart move.