If you’re wondering if there’s a chance of crypto crashing, you’re not alone. The recent crash of the stock market is a stark reminder of the risks involved with cryptocurrencies. The lack of liquidity in the crypto market has led to similar crashes in the stock market as those experienced in 1929 and 2008.
Ether
Cryptocurrencies have had a rough start to the year, with Bitcoin, Ether, and Binance Coin all down about 20% year to date. In addition, Tether, a stablecoin tied to the U.S. dollar, tanked 10%, and other popular tokens saw 6-11% drops in the past 24 hours. The overall cryptocurrency market cap fell by almost $1 trillion. While Ether’s drop is less dramatic than Bitcoin’s, it’s still down 6.8% for the week.
The recent volatility comes amid wider market selloffs. The Federal Reserve has indicated it will raise interest rates seven times this year, in an effort to fight inflation. Meanwhile, the Russian finance ministry said it would take central bank proposals on cryptocurrencies into account. The government of Russia, which has not yet issued official guidance on the future of cryptocurrencies, is not in favor of cryptocurrency. But it is unlikely to prevent the price from falling further.
Bitcoin
It is important to understand that the current market is highly volatile and that bitcoin may crash at any time. This is natural, as the market is prone to surges and crashes. The recent pullback in Bitcoin’s price was expected following its seven-week rally from $40K to 69K. This dip can, however, be temporary, as more investors will jump in to buy the dips. Similarly, if the price is rising, more investors will jump in to buy the dips.
The cryptocurrency market is currently at an all-time low, with the total market cap dipping nearly $1 trillion. The recent sell-off is being attributed to the tightening of regulatory screws in China, one of the biggest countries involved in bitcoin mining. The cryptocurrency market has seen a rough ride, and several tokens are trying to recover from a nine-figure wipeout. Although it is difficult to assess the exact extent of the market’s collapse, experts believe that more than $300 billion has been wiped out of the market in the past seven days.
Ether’s native token
The value proposition of Ethereum and Ether’s native token is unclear. The decentralized platform enables developers to build markets, store registries of debts, and move funds in accordance with long-term instructions. It also helps mitigate external risk factors of decentralized applications, such as ICOs. However, the company does not discuss its value proposition or the reasons why the native token of Ethereum is crashing. The price of the native token of Ethereum is $ETH, which is the Ethereum Foundation’s way of providing services.
The decline in ETH price is not limited to OpenSea, and is largely the result of a wide range of factors, including the failure of the platform to scale and the use of more secure contract authoring practices. It has been attributed to a range of other factors, including the recent change in direction of the US Federal Reserve, which is said to have impacted the price of many cryptocurrencies, including Ether.
Cardano
If the Cardano network’s native token ADA is about to crash, the market needs to take a few precautionary measures. The currency has recently slid below $1, and now stands at 68% of its September ATH. The price of ADA found some temporary support over the weekend, but has since fallen below the $0.9 support level. Based on the Fib level and February’s low, it’s unlikely that ADA will drop further below $0.97.
While there are many factors that could contribute to the price of ADA, one factor that could cause the crypto to crash is its inflated value. Currently, 1% of the world’s population is not using the crypto, and its price is correlated to that of Bitcoin. This indicates that overvaluation risks are the real culprit for the cryptocurrency’s crash. However, Cardano still appears to be a promising competitor and could easily pass the $10 mark before 2021. Although many investors are concerned, Cardano has not yet delivered on its promise to be the Ethereum killer.
Solana
Several factors have contributed to the Solana network crashing. The initial offering clogged the network, which slowed down transaction processing by 50 percent. The network also suffered from another attack on December 13 and 14 and ran out of memory. The reason for the network’s downtime is unclear, but it is likely related to bot attacks. The issue could be easily avoided, though. Here are three possible causes of Solana crypto crashing.
As a result of the network failure, the Solana network had limited capacity compared to its advertised 50,000 transactions per second. Moreover, the network was down for 29 hours in January due to duplicate transactions. Because of this, the Ethereum blockchain suffered from outages and the cost of transactions skyrocketed. Some users ended up paying five ETH and $14000 in gas fees just to send one transaction. Solana is now back online.
Meme
A recent dip in cryptocurrency prices has prompted a spike in memes. People have taken to social media to express their frustration with the market, including Elon Musk, who posted a meme mocking the crypto community. Perhaps inspired by a sibling rivalry, Musk poked fun at “decentralized autonomous organizations” and “web3” lovers. Although Musk didn’t include commentary in his post, many readers interpreted his joke as mocking the people who believe in crypto.
To be successful with a meme coin, it is imperative that the community have a common interest. This should not be centered around profits or encouraging new investors. Instead, the community should be built around a shared interest, such as a love of Shiba Inu dogs or strays. To gauge the sentiment in a community, investors can visit social media sites and gauge how the community has built around a particular project. Other methods include subscription services and freemium platforms.