It’s lunchtime again, so time for our crypto lunch. The live Bitcoin price and prices of the top 25 crypto show the first crash of 2022. We give 4 reasons for the crash and analyze what to expect next.
We start with the live Bitcoin price and prices of the top 25 crypto.
Live bitcoin price and prices top 25 crypto crash
At the time of writing, the live Bitcoin price is quoting EUR 37,887.16 ($42,857.07). This is down 8.44% from yesterday’s crypto lunch.
The crypto crash is also reflected in the prices of the top 25 crypto. With the exception of small positive results among the stable coins, we only see heavy red numbers. The biggest loss of the last 24 hours is with 13.65% for Polkadot (DOT), but also the other crypto are suffering heavy losses (also with double digits). We see this when we look at the live crypto prices on the Tradeincrypto.com site.
The first crypto crash of 2022, what’s going on? We give 4 reasons
With the current losses, we can without exaggeration speak of a cryptocurrency crash. Of course, the question is what is going on. Based on initial analyses, we can identify four reasons.
1. Crypto continues to show correlation with U.S. stocks
First, it is notable that the crypto crash began last night, at the same time as the decline in U.S. stocks.
On its own, the crypto market seemed to be in a positive mood up until that point. Prices were rising and Bitcoin was on its way to $47,000. Evidently, the correlation with stocks we discussed earlier was confirmed again, because from the moment stocks fell, crypto prices fell with them. Bitcoin lost the support level of $46,000, then quickly fell further and is now selling below $43,000.
2. Bitcoin’s position as a ‘save haven’ seems to be less important
Still, the drop in U.S. stocks must also be coming from somewhere. This turns out to be true, because that drop is a reaction to the release of the minutes of the December meeting of the FED. It now appears that it was discussed there to take measures against inflation sooner than expected. As a result, there is a chance that inflation will be less severe than thought and thus the position of crypto as a “safe haven” against inflation will be less important. The market now seems to be pricing in the diminishing of that risk.
3. Omicron uncertainty remains a factor of interest
Another factor that continues to play a role is COVID19. Despite the fact that the symptoms do not appear to be too bad, many investors are cautious due to developments and uncertainty about the Omicron variant and new mutations. They are therefore reacting extra defensively to volatility in the market.
4. New report highlights call for regulation
In addition to this malaise, more bad news came this morning. Reuters reported that crypto crime hit a record high in 2021 in terms of value. Although the share of crypto crime in relation to the total number of transactions is small (0.15% so far), the financial value is increasing. So far for 2021, $10 billion was already traced as being of criminal origin. These large numbers are attracting a lot of attention and there are fears of further regulatory frenzy. By the way, there is also a chance to hit cryptocriminals in 2022. With these tips, you can avoid losing your crypto.
What can we expect from crypto prices now?
Of course, in a cryptocurrency crash, it is always difficult to determine a short-term strategy. Many analysts wait for the market to stabilize in order to make reliable analyses from there. The fact is, however, that many analysts who had anticipated a long-term bull run in January are not happy now. Consequently, the market is uncertain.
While some expect the price of Bitcoin to fall further based on fundamental factors (as we saw yesterday), others are actually positive based on technical analysis. For example, in the video below we see that analyst Credible Crypto still expects a peak in 2022.
Obviously, we hope the same for all investors. Nevertheless, for now we stick to the tips for investing in an uncertain market.
Of course, we will continue to analyze the market daily and report on all developments.
Want to stay up to date with the latest stock price developments?
You can always follow the developments yourself with our WANT crypto analyses or the background articles and previews on the crypto market and Bitcoin. Of course, you can also follow the live quotes 24 hours a day if you want to stay informed in real time. Are you interested in other investments besides crypto? Then our weekly price forecast might be a reading tip.
Note: We never give financial advice, so our contributions should not be interpreted as such. Always do your own research and decide rationally if, when, what and how much you want to invest in.