Looking at crypto price charts, we can see their dynamics and changes throughout assets' existence. Those charts show us red and green lines striving up and down, demonstrating up and down trends in the market. Today, June 2023, we can see that the market still did not recover from the huge collapse that occurred in 2022. So what happened to crypto? Let’s try to find it out today, but first, let’s see what factors can have an impact on crypto price:
The underlying principle of supply and demand holds immense importance when it comes to determining the prices of cryptocurrencies. If there is a strong demand for a specific cryptocurrency and the supply is limited, the price will likely rise.
Why Crypto Market is Down Today
The sentiment and perception of investors towards cryptos can exert a significant influence on their prices. Positive developments, such as advancements in regulations or increased adoption by institutional investors, can generate optimistic sentiment and drive prices upwards. Conversely, negative news, security breaches, or uncertainties regarding regulations can create a bearish sentiment and result in price declines.
The progress and innovations within the crypto sphere can have a profound impact on prices. Noteworthy advancements, such as protocol upgrades, the introduction of new features, scalable solutions, or enhanced security measures, can enhance investor confidence and propel prices higher.
Actions and announcements made by governments and regulatory bodies can significantly impact crypto prices. Favorable regulations or official recognition of cryptocurrencies can instill confidence and attract more investors, thereby positively affecting prices. Conversely, stricter regulations or bans can create uncertainty and cause price declines.
Due to the relatively low liquidity of certain assets and the absence of strict regulations, market manipulation can occur. Large holders, often referred to as “whales” can strategically buy or sell substantial amounts of particular assets to influence prices in their favor.
Inflation rates, interest rates, geopolitical events, and global economic stability, can indirectly impact crypto prices. For instance, during periods of economic uncertainty or hyperinflation, some investors may view cryptocurrencies as a hedge against traditional assets, resulting in increased demand and potentially higher prices.
Media coverage and public perception can wield a significant influence on crypto prices.
Why Did Crypto Crash?
The crypto falling trend in the spring of 2022 can be attributed to various factors. These include an impending global crisis, the eruption of a full-scale war, a challenging global economic situation, an unfavorable news backdrop, the Federal Reserve’s decision to raise interest rates, and the temporary suspension of crypto withdrawals by Binance. Collectively, these circumstances significantly diminished the demand for digital assets. As the collapse ensued, individuals began hastily withdrawing their funds from the crypto market, consequently pushing cryptocurrency prices further down.