Due to a series of events that have significantly harmed any altcoin, including Bitcoin and Ethereum, the crypto winter may last longer. Bitcoin, the most popular cryptocurrency, fell more than 3% to $16,160 after failing to break out of a descending triangle pattern in the market. Similarly, Ethereum, the second-most valuable cryptocurrency, has fallen nearly 5% to $1,171, following Bitcoin’s lead.
It looks like that the bad time of crypto is not going to end any time soon. The recent FTX collapse has also affected the entire crypto industry and most of the big coins are going down when it comes to their price. Just recently, we have seen the sudden crash of BTC going below $17000 which looks quite alarming to all Bitcoin holders. While on the other hand, for the people who were thinking to buy BTC, it may be a good time for them since they are now less expensive than their value before the collapse.
China Lockdown Causes a Sell-Off in Global Markets. Cryptocurrencies fell as a result of investor apprehension in global markets brought on by protests in China against Covid restrictions. Outraged by the stringent COVID-19 regulations, protesters demanded the resignation of China’s powerful leader.
On Sunday, officials in at least eight cities attempted to suppress demonstrations that posed a direct threat to the ruling Communist Party. This was a rare rebuke. Nearly three years into the pandemic, dissatisfaction with President Xi Jinping’s well-known zero-COVID policy has sparked a surge of public disobedience on the mainland not seen since President Hu Jintao took office a decade ago.
The COVID-19 regulations are also having an impact on the second-largest economy in the world. The largest demonstrations against the ruling party in decades have taken place since and have spread to cities like Beijing, the capital, and dozens of university campuses.
China’s role in the cryptocurrency slump:
The second-largest economy in the world, China has a significant impact on global financial markets; therefore, financial backers are searching for a place of refuge to stop their speculations. Since stocks and digital currencies are not considered safe havens, today’s price action is bearish.
However, Bitcoin and other currencies may experience a sharp bullish reversal as the situation in China improves and the protest ends.
However, given that some investors are beginning to believe that Chinese stocks may have reached a crossroads following the recent sharp gains, the protests may dampen sentiment. This is the case in spite of a growing chorus of bullish China calls on Wall Street, which cited favorable policies and low valuations.
The unrest in China may also dampen hopes that a gauge of currencies from emerging markets will experience its strongest monthly rally in six years on global markets.