Market situation: Digital currencies have not declined, but this current frustration is necessary

After the Federal Reserve meeting on Wednesday, the price of bitcoins and pennies increased briefly; But this price increase did not last long. In the following, we review the analysis of several analysts of the digital currency market situation.

To Report Bitcoin Desk, the price of Bitcoin fell to its lowest level on Thursday at $ 20,755. After the Federal Reserve raised interest rates by 75 basis points on Wednesday, US Federal Reserve Chairman Jerome Powell reassured investors that the central bank was committed to maintaining its aggressive policies. After that, the price of Bitcoin reached $ 23,000.

Solana and Dodge Quinn, who both saw a 16 percent increase in the most recent wave of price increases, returned to previous price levels before Powell’s remarks.

The same scenario occurred in May (May) after the previous meeting of the Federal Reserve. At that time, when Powell explained the rate hike, US stock market prices and digital currencies initially rose; But the next day, investors faced real prices.

Also read: Bear Market Benefits for Bitcoin

Over the course of the night, the price of Bitcoin approached the $ 20,000 threshold, and reaching this price level could liquidate many trades. Apifiny CEO Haohan Xu says the situation is still tense, given the lack of upside sentiment in the market and the deteriorating liquidity situation.

Zhou added in a note:

Rising interest rates reduce the returns of the digital currency market. Lending is very important for digital currency market players. The issue of loans in this market has been important both for those traders who tried to make a profit from contango and for the traders who arbitrated in exchange offices.

A cantango is a condition in which the transaction price of an asset in the futures market is higher than its normal market price. Zhou pointed out that as the cantango fades and the digital currency market shrinks, institutions will have less incentive to implement these strategies, which will reduce the need for loans. All of this, in addition to general market conditions, is forcing lenders to reduce their lending rates to a good degree.
Billionaire investor and host of the Shark Tank program, Kevin O’Leary, said yesterday that the digital currency market is not over yet; But before digital currencies can start their next steady growth, investors need to give in and capitulate, and that frustration will be a good thing for the market.
Capitalization occurs when investors lose faith in the market and there is severe selling pressure in the downtrend.

How much do you like the new Atrium merger?

Andy Edstrom, author of Kevin Desk, adds a description of Atrium’s recent migration to the stock-proof mechanism and the users’ hopes for it. According to him, many market participants are very optimistic about the integration of Atrium and its migration to the consensus-proof mechanism; While the actual result is likely to be against their will.

In general, people are excited about the effects of this kind of expected improvement and think that it will have a dramatic effect on price. According to Adstorm, but this news is a kind of news sale.

Adstorm refers to news sales, the proverb “buy with rumors and sell with news” common among market participants. A strategy according to which some people, along with rumors about an asset, buy it and sell it after the actual news is published.

This merger has two consequences: it either succeeds or it fails. According to Adstorm, in both cases it is unlikely that these events will lead to an increase in the price of atrium; Because proof-of-stock Atrium needs to compete with another bunch of proof-of-stock assets to attract market share of investors and traders.

Adstorm says he does not know whether Atrium’s dollar price will rise or fall from now until the merger, and given that it has been delayed for years, it is unclear whether the merger will take place. If one day this happens and the merger is possible, he believes there will be a news sale; That is, people who have already bought will start selling.