Bitcoin Falls Below $28K, ETH Loses Momentum
Positive momentum is evaporating as the crypto market has faced a downtrend, extending its decline for the eighth day in a row.
The crypto market has experienced significant corrections in the past week. Bitcoin and Ethereum have lost about 12% of their value in the past 7 days, per data from CoinMarketCap.
The flagship crypto hit a new high in 2023 – breaking the $31,000 mark on April 14. But now it has faced sharp corrections, losing up to $1,000 in value almost every other day.
The reason for the decline remains unclear as no recent news has emerged. However, many speculate that some investors may have decided to take profits after the strong growth of the world’s largest cryptocurrency in the first quarter of 2023.
Another common explanation is the cautious approach to the upcoming month when the crypto market historically experiences “sell in May”.
Tokens Trade lower
Ethereum has also stumbled along with the market as its price has taken a 12% drop in the past week.
Ethereum fell from a high of $2,141 to $1,825 this weekend. This is the lowest mark since early April, wiping out gains made during the recent successful Shanghai upgrade that took place on April 13.
Two other major coins recently in the conversation, Ripple (XRP) and Cardano (ADA), have followed the same pattern. Both reportedly fell to multi-week lows – XRP fell by $0.4644 and ADA fell by $0.3848.
The majority of the top 20 coins also joined the downtrend, falling 4-6% in the last 24 hours. The total value of derivatives orders liquidated in the last 24 hours has reached $190 million, with long orders accounting for 89% of liquidations.
The global crypto asset market has seen a massive decline, with over $100 billion withdrawn. With the market still uncertain, Bloomberg analyst Mike McGlone suggests a potentially significant drop, as Bitcoin and Ethereum could face resistance going forward.
Optimism in the market
Despite the current challenges, the Bloomberg analyst remains optimistic about the long-term prospects of the largest cryptocurrency.
However, the tightening policies of the US Federal Reserve (Fed) and the resulting stock market decline leading to a potential recession could pose risks to all assets, including cryptocurrencies, in the near future.
Earlier this week, the EU Parliament adopted MiCA regulations. MiCA will be the first ever comprehensive legal framework for the regulation of cryptocurrencies.
This landmark development brings much-needed clarity and regulation to the rapidly evolving world of cryptocurrencies, filling a critical gap in the regulatory landscape.
After receiving widespread praise and support from the crypto community since its proposal in 2020, MiCA is now set to go into effect next year.
While industry leaders have acknowledged the benefits of MiCA as a positive step toward crypto regulation, there have been concerns that certain aspects are too strict.
Nevertheless, MiCA represents a bold and progressive move towards improving transparency, security and accountability in the crypto market.
More regulations to come
The European Parliament’s resounding support for the ground-breaking rules governing the digital asset market has sent shockwaves of optimism through the global crypto community.
This significant development is expected to create a ripple effect of positive sentiment as it paves the way for a safer and more regulated crypto landscape in the EU.
With increased oversight and accountability, investors and crypto enthusiasts can look forward to a more transparent and reliable market for digital assets. In addition, they will have to provide far more personal information.
The provisions of the MiCA are expected to enter into force approximately six months after being published in the EU Official Journal, which could be around June 2024.
While more regulations are coming to crypto, the global nature of the market makes them much more difficult to regulate. Governments that are heavy-handed in regulating markets can harm their own economies.
