Crypto Prices Recover But Still Flatline – What’s Next?

The past few weeks were quite hard for the cryptocurrency market. The majority of the digital assets fell in value, resulting in massive and large-scale panics in the market. Some of the market experts claimed that the selloff happening in stocks and crypto markets was intertwined.

Recently, the co-founder of Coin Metrics, Nic Carter, noted that there might be some correlation between the price drops of tech stocks and BTC, specifically in terms of long-duration tech stocks. He said that this could be mainly due to the fact that crypto-assets are becoming more financialized and are closer to the mainstream financial industries than ever before. There is some data that can be used to support this idea.

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After taking a look at the crypto and tech stocks’ price performances, it can be seen that both performed quite well in the last quarter of 2021. On the other hand, both of them experienced dramatic underperformance throughout the past month. In January, BTC experienced a massive 17 percent fall, while other crypto assets had even bigger losses.

As for the tech stocks, Nasdaq, which is an index made up of large tech companies, also experienced a double-digit decline near the end of January. However, there are some issues with this idea. For example, some of the largest tech companies, such as Apple and Microsoft, managed to post great games recently, which has supported their performance in the market and the index managed to gain over 7 percent.

The index still continues to go up. As for crypto assets, they have been struggling again. But, one thing that is increasing concerns around crypto-assets is the fact that not only are the prices low but so is the trading volume. The BTC trading volume dropped dramatically in January and still has not recovered.

Impact On Traders

The prices of cryptocurrencies started dropping dramatically without any previous signs of it. This has caused numerous issues in the market, one of the main being the fact that not many people expected this fall.

While some market experts have hinted at possible price drops on cryptocurrency prices in 2022, such a huge drop was not something that everyone expected.

In fact, many of the experts in the crypto industry claimed that 2022 would be an amazing year for the market. While it is too early to talk about the whole year and its outcomes for the crypto market, it can still be said that signs don’t look too good.

One of the biggest issues with the industry today is the fact that the volume has dropped as well. While the crypto market has experienced massive falls in prices before, the situation is a bit different today.

Usually, experts say that such huge dips in price bring some new traders to the market. The logic behind this idea is that traders see price dips as an opportunity to buy some cryptocurrencies, hoping that the price will go back to its highs in the future.

But, it was recently reported that near the middle of January, the volume of crypto trading has dropped dramatically. This means that fewer people were trading cryptocurrencies. The trading volume has yet not recovered, which might increase concerns among some market participants.

That said, crypto trading still remains to be very popular among individuals around the world. There are several different reasons behind this. The main thing is that crypto trading has become massively popular in 2021. Such a hugely great performance of the market has caused its popularity to skyrocket.

As a result, many newcomers have started trading cryptocurrencies. The best thing about becoming part of the market today is that getting started no longer requires traders to have massive trading experience. Traders can simply use the BTC trading bot which will automate the whole trading process and activities.

This can make it a lot easier for traders to analyze the price movements in the market. Crypto bots can also be used for actual trading activities.

What’s Next?

Making predictions for the upcoming year and the possible price movements in the market is very hard. While there are many experts who believe that the prices will start to become more stable in the following month, there are others who believe that the massive price falls will continue for some time.

Initially, 2022 was predicted to be an amazing year for cryptocurrencies by the majority of the market experts. However, due to the events going around the world, the prices fell dramatically.

One of the reasons for this development could have been the rumors surrounding the US cryptocurrency trading market and the possible regulations the Biden administration might be working on.

Rumors about this spread online a few weeks ago, which has further caused the prices to fall. A lot can depend on this if it turns out to be true and the prices might continue to drop further.

However, how this will turn out is still very much unclear.