Experts did not see the fall in the rates of digital assets as a threat in the long term
Over the past 24 hours, the cryptocurrency market lost about 16% of its total capitalization, which fell to $1.8 billion. This decline was one of the most significant since the beginning of 2022.
Analysts attribute the market decline to macroeconomic factors and the likely aggravation of the geopolitical situation. Bitget’s marketing director in the CIS Anton Toroptsev believes that investors’ sell-off of high-tech assets, such as digital currencies, is related to the instability of the labor market in the United States, the fall in the index of business activity in industry, the level of the current key rate and the conflict between Israel and Iran.
“Additional nervousness among investors was caused by the uncertainty of the US Federal Reserve’s actions in matters that concern interest rate changes,” said Nikita Vassev, founder of TerraCrypto.
He also believes that the situation is influenced by market participants’ anxiety over the risk of recession in the United States. In addition, the global economy is affected by unrest in Venezuela, the death of the head of the Hamas politburo, tensions between Israel and Iran. This “does not add investors confidence in the future and does not inspire them to buy high-risk assets,” the expert believes.
The stock market has also seen significant drawdown due to macroeconomic factors. According to Richard Teng, head of Binance, major indices and futures have fallen sharply due to rising recession expectations.
“These fears intensified following the release of the US jobs report on Friday, raising concerns about the sustainability of economic growth. In addition, ongoing geopolitical tensions contributed to market uncertainty and volatility,” a top Binance executive wrote.
However, analysts do not see the decline in digital currencies as a threat to the market’s long-term outlook. Binance hopes that the Federal Reserve will cut interest rates as early as September, which will have a favorable impact on the U.S. economy.
“This is not to say that the cryptocurrency market will not recover again this year — in the coming weeks we will see active actions by a group of G7 central banks aimed at preventing an international crisis. This will take the form of emergency support measures, i.e. flooding the markets with liquidity, which will also support cryptocurrency. The key question now is only to what levels the market will fall to before it starts to recover on positive fundamental signals,” — said an analyst of the cryptocurrency market Victor Pershikov.
