Cryptocurrencies fall amid pessimism; "I don't know what could trigger a rebound"
By Álvaro Estevez / Alejandra Zamora
Date: Wednesday 21 Dec 2022
(Sharecast News) - Cryptocurrencies are going downhill... And possibly without brakes. Despite Bitcoin (BTC) and Ethereum (ETH) rebounding above 0.1%, trying to regain $17,000 and to consolidate at $1,200, respectively, most cryptocurrencies are trading down. In the last 24 hours, the total market capitalization of 'cryptos' has retreated by 0.11% to $809.68 billion and everything points to the fact that it could retest the annual lows.
Pessimism is spreading throughout the digital asset market, which seems unable to raise its head after FTX´s collapse. A new bankruptcy in the cryptocurrency space became known on Wednesday, that of Bitcoin miner Core Scientific, which filed for Chapter 11 of the US Bankruptcy Act despite continuing to generate positive cash flow. The company also announced that it plans to continue mining Bitcoin while meeting its obligations to its debtors.
The moves by central banks around the world add to the trickle of bad news in the sector, as they remain steadfast in their policy of rate hikes as indications grow that major economies such as the United States will enter a recession next year.
"Given the reaction of other asset classes, Bitcoin's rally is unimpressive as cryptocurrency traders remain on the fence about which will be the next big cryptocurrency domino to fall or whether we will receive any clearer guidance on the regulatory front," explained Edward Moya, senior markets analyst at Oanda.
Jeff Dorman, chief investment officer at Arca Funds, stressed that "while I think we are bottoming out, I don't know what might trigger a rebound."
"We expect digital asset selection to transition to higher quality names such as Bitcoin and Ethereum, based on factors such as sustainable 'tokenomics,' the maturity of the respective ecosystems and relative market liquidity," commented Coinbase research director, David Duong. According to the expert, "investors' willingness to accumulate 'altcoins' has been severely affected by the deleveraging in 2022 and may take many months to fully recover."
In other market news, there have been losses across the board. Ripple (XRP) retreated 0.6%, Dogecoin (DOGE) and Cardano (ADA) lost 2%, as well as Polkadot (DOT). Polygon (MATIC) dropped 2% and Shiba inu (SHIB) fell 1.3%; meanwhile, Solana (SOL) retreated more than 2.6% and is on the verge of losing $12. On the other side of the scale, there have been moderate gains for Tron (TRX) and Litecoin (LTC).
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