In a recent article, Markets Insider discussed the fall in the cryptocurrency market. According to the publication, this market decline was mainly due to the weakening of the financial markets.
Global Stocks Stabilize After Worst Dow Jones Day of 2021, Cryptocurrencies Fall as Risk Aversion Remains Elevated https://t.co/habXJXtmdw
— Markets Insider (@MktsInsider) July 20, 2021
Why does this happen?
Cryptocurrencies fell due to investor panic, according to Markets Insider’s article. It also showed that, in the current situation, most investors are not willing to take risks.
In other words, such a decision by investors caused a massive sell-off in the stock markets, which led to a drop in cryptocurrencies in general.
The first cryptocurrency in decline
Of course, in this situation, most investors’ attention is fixed on the price of the first cryptocurrency. As the largest cryptocurrency by market value, Bitcoin fell 5.6% the previous day on Tuesday, falling below $30,000 in 24 hours to $29,790.
Bitcoin’s roller coaster ride shows that it is too correlated with other financial assets, but little by little it is becoming widespread.#Bitcoins
—Daniel Lacalle (@dlacalle_IA) July 20, 2021
So since hitting an all-time high in mid-April, the price of the flagship cryptocurrency has already fallen almost 54% overall.
It was also a key factor in scaring off investors. So, according to Edward Moya, Principal Market Analyst at OANDA, Bitcoin is the riskiest asset in this situation.
According to the analyst, the first cryptocurrency could face strong selling pressure. This will happen if Wall Street goes into panic mode.
Note that the decline in the price of the first cryptocurrency is also due to the recent volatility in the stock and commodity markets.
Thus, on Monday, the main stock market indices in Europe fell by 2.5% and in the United States by 1 to 2%. Oil, on the other hand, fell 6%.