on the crypto
At 11:30 am, Solana bounced 10% in the past 24 hours, while Ethereum made a small gain of 0,7%. That said, Bitcoin is currently in the red, with a further 2,6% decline in the past 24 hours, albeit still well above yesterday's lows.
These staggering declines in major tokens, considered by many to be stores of value, appear to be driven by three key factors.
In many ways, this week has been one of the busiest for cryptocurrency investors for some time now. Indeed, while many investors are hoping that some semblance of normality will take over at some point, it appears that negative catalysts continue to find a way to climb to the top in 2022.
Investors can't do much for the macro environment. Liquidity will be taken out of the system sooner or later, and this will certainly have an effect on the cryptocurrency market.
However, it is the potential systemic risks associated with cryptocurrency lenders and exchanges that worry investors. We've all seen what happened when Terra's stablecoin ecosystem imploded. If falling cryptocurrency prices mean stablecoins, cryptocurrency exchanges, and lending platforms aren't going to work, there's hardly a long-term bullish case for this sector.
To be sure, the cryptocurrency market has not yet undergone a real "stress test" through a recession. While it is debatable whether we are already in a recession or whether a recession will materialize, it is clear that this environment is perhaps the most unstable the cryptocurrency market has ever seen since its inception.
As a result, 2022 promises to be a volatile year for investors. While I'd like to be able to define a bottom for these top tokens, as long as there are no signs of capitulation in the markets, it's unclear if we're nearing the end of the sell-off. I am preparing for what could be a very eventful race.
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