Steemit Crypto Academy Contest / S1W4 – Reviewing the Instability of the Crypto Market by @sachin08
11 comments
Hello everyone!
I was quite inactive for last few days as I was really busy in my personal life. But From Now, I will try to active on Steemit and will try to take part in most of the contests of Steemit Engagement Challenge.
This Week, It is all about Reviewing the Instability in Crypto Market as We all have seen in recent days hoe crypto market has declined and how one of the cryptocurrency wiped off.
Most of the cryptocurrency market is currently experiencing a sharp decline, especially in recent days. What do you think of this drop? State its causes and how long do you think it will continue in this downtrend?
Currently, Crypto Market is declining day by day and It is it's one of the bad phase. One of the cryptocurrency named "Luna" has also wiped off and Even Stable coins are declining. This market situation has really created panic among investors and traders.
This drop in cryptocurrency market has really created panic situation. But I think Market will take some more time to get stable in positive direction.
We all know that Crypto market is well connected to Bitcoin and We have seen a huge dump in Bitcoin in recent week as BTC dumped to $24500 recently.
Due to Bitcoin, Many Altcoins crashed and I really think that Altcoins will take a lot of time to recover and I think this year will be accumulating zone for crypto market.
From the above image, I want to tell you that Bitcoin has printed it's 7th continuously red weekly candle and This is happening for the first time since Bitcoin comes into existence.
Now, Let me tell you some reasons of this Market Dump.
The Marketcap of crypto has declined a lot. It has declined to $1.3 trillion from thr Marketcap of $3 trillion. It is halved from the peak of marketcap.
One of the reason is also that the U.S. Federal Reserve about high inflation. As inflation was rising to it's peak. So, Federal Reserve decided to take action against inflation.
Another reason can be the Crash of Luna (Terra) cryptocurrency and dump of stable coin (UST).
Why doesn't this drop in the price of a few coins decrease their trading volume (eg: Bitcoin)? How will they deal with this market instability?
Well, We have not seen a huge decline in the trading volume of cryptocurrencies in this dump if we take an example of Bitcoin. It is not necessary that dump comes after decline in traded volume. Currently, there is around $32.10 Billion Volume of Bitcoin and It has not declined too much. So, The reason of this dump is because of the US Federal Reserve news.
There is instability in current market scenario and I think It will take time to become stable in proper direction. Volume is generally not affected in this dump and trading volume is somehow approximately not declined too much.
To deal with instability in crypto Market, I think First Bitcoin has to become stable in one proper direction but I think it will take time as Recently, there is a news which tells us that Luna foundation has sold almost all their Bitcoins which really affected the price of Bitcoin.
What is the relationship between the current instability and the downfall of the Terra ecosystem and its Luna currency? Do you think its price will bounce back? If so, tell us how and when?
Luna (Terra) is a crypto project which uses it's own stable coin (UST) for global payments. While, Luna cryptocurrency has crashed and nearly wiped out as It has relation with it's stable coin (UST).
As Stable coin is pegged to 1:1 ratio to US dollar but UST failed to peg this ratio and It dropped. To maintain UST price, Luna foundation burnt a lot of Luna to maintain the price of UST.
The main reason for the crash of Luna coin was the depegging of it's stable coin UST. At first, UST went down to $0.6 and this created panic among investors but Now, UST price has literally crashed.
Due to the crashing of these two currencies, there was panic situation among investors and Luna foundation has also sold so many Bitcoins from their reserve and this results in the dump of market.
Will it's Price bounce back?
Honestly, I didn't think that Price of Luna will bounce back and Price of UST will come of $1. It is really hard to peg the value of UST to $1 in current situation.
It will need billions of investment from investors to maintain the price of these cryptocurrencies and I don't think It is possible in current scenario.
Meanwhile, The owner of Terra ecosystem "Do Kwon" is trying hard to recover these cryptocurrencies and they have also explained some recovery plans.
Honestly, I don't think that these cryptocurrencies will survive or not. I think there is som chances of survival of Luna currency as Do Kwon is saying that Luna has it's different mechanism and useful usecases and It can perform even without UST. But Price will not bounce much. It is very difficult to touch even $1.
Our Steem ecosystem, like most currencies, has been affected by this market downturn, has this caused you as a user some stress? Or are you still confident in this project? Give your opinion, specifying the arguments that support your review.
Well, During the downfall of market, Steem currency has also been affected and has dumped to $0.2 from $0.45. Most of the Altcoins has declined and This is not a concern at all for Steemians.
As We all know that There is not so much decline in trading volume and It is really a good sign that there is not much decline in traded volume and I am very confident in this project.
As there is an initiative for extra rewards for joining club100 and club75 will ensure more powerups and this is really a good sign.
I believe Steem price will touch the mark of $0.5 very soon and It has a great future as Steem Ecosystem is running in proper manner and It will do better in future.
Conclusion
The recent downfall in crypto Market created panic situation among investors but I believe All Altcoins will make a strong recovery as Traded volume is being approximately constant and It is good sign.
Comments