Crypto crash: Worst could still be to come with fears of Bitcoin plunging to $10k
Cryptocurrency: Expert discusses success of Bitcoin
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Currently, bitcoin (BTC) is testing its 200-week simple moving average. So, for long-term investors, such as MicroStrategy’s Michael Saylor, it’s all steam ahead as he scoops up ‘bargain’ bitcoins at these levels not seen since 2017. The current price of the world’s preeminent cryptocurrency is now $19,213.
The second largest cryptocurrency, ethereum, dipped below the psychological $2,000 level, before rising to $1,056 as of the time of writing.
The combined cryptocurrency market capitalisation has dropped to $882bn, now investors are poised in indecision as to whether to bail back in and hope they’ve bought the floor, or short blue chip cryptos and watch the whole market sink further.
Now the Daily Express has discussed the dramatic events with a cryptocurrency expert to make sense of the recent crash that began in earnest with the collapse of the UST Terra stablecoin last month.
Cryptocurrency investors are watching with caution two crypto Defi protocols, the Celsius Network and Babel Finance, and one hedge fund, called 3AC.
Both Babel Finance and the Celsius Newtork have frozen withdrawals from their crypto-lending platforms.
Jake Waters of Ghost Protocol spoke to Express.co.uk about how these crypto entities are related to the current crypto-crash.
He said: “If we continue to see more sell-offs from whales and miners, this will obviously push the price down further, and will reach Celsius’ liquidation price which is around $14K right now.
“If that price gets reached, we can see BTC drop to around $10K again.”
Mr Waters is a lead developer of the Ghost ($GHOST) cryptocurrency project that places the privacy of transaction data to the fore.
The Ghost ($GHOST)cryptocurrency allows transactions using a state-of-the-art escrow pool to shield and erase the history of transactions.
Mr Waters added that the recent crash in BTC is related to certain hedge funds & DeFi protocols being over-leveraged.
Explaining this to Express.co.uk he said: “We saw the first of this instance with Terra and their poor attempt at making an algorithmic stable coin.
“Once the stablecoin lost its peg, Terra Labs had to scramble to support the delta in price difference from its holdings in BTC.
“They took out large positions and ultimately over leveraged.
“More or less the same can be said for 3AC (Three Arrows Capital).”
Mr Waters added that for crypto traders, “it’s a difficult atmosphere to trade any asset right now”.
He added: “Inflation is soaring higher than we’ve ever seen and the Fed is taking baby steps at doing so.
“Taking a step back and looking at the two-year chart of BTC, it would make sense to buy back at these prices.”
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