Apparently, December 2021 woke up and chose violence as the crypto market had a massive crash. The cryptocurrency market shrunk by $500 billion in less than 24 hours with a total of $2.4 billion in liquidations. Although Jerome Powell is mostly blamed for this crash, we’d like to play devil’s advocate by pointing out multiple other reasons for the plunge.
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Crypto Enemy Number one!
Federal Reserve Chair Jerome Powell finally broke up with his favorite term “transitory” which he persisted upon for describing the inflation. After finally admitting that the inflation is a serious issue, Powell’s slightly concerned attitude brings promises of tighter monetary regulations. If that was not enough, the growing uncertainty over the federal reserve and the tapering talks hit the market right in the heart.
Many believe this to be the primary cause for the crash. However, looking at the big picture, we can trace a bunch of elements all bundled up together as a tightly crafted bomb that caused the market implosion.
Covid Market Crash
Frankly speaking, Covid was a blessing for the crypto market. As the masses spent time in quarantine, crypto became the best alternative for passive income. In that regard, it did provide a basic income for the people in need.
This time around however, as people braced for the holidays and vacations, the Omicron variant entered the chat. With all the talks about the severity of the variant and the vaccine’s ability to fight Omicron, the rapidly spreading concerns took on the market.
Political Aspect of Market Crash
A report came out just before the plunge about how Russia is preparing 175000 troops to attack Ukraine. The tensions between the two classic enemies are cold war-level high as the energy crisis looms over Europe.
On the rising sun side of the world, China is doing the same thing for Taiwan and the US is once again there to protect democracy.
Tis not our purpose to blow the horns of world war 3. But, and there is always a but, things look messed up and stuff in terms of political turmoil.
Santa Took my Bitcoin
Pretty soon, Christ will be born and people need to cash out in order to pay for vacation. It is a great time to sell your assets and live a little. If not travel, a better option is to sell off and pay for an overpriced PS5 or an RTX 3090 to play the holidays away with all them frames per second.
All in all, people sell before the holidays.
Where Are We Headed?
At this point, it is unclear whether the bottom was at $40k. Considering the fundamental factors, it is still too early to make short-term predictions. We hope the best for our customers and press F in the keyboard for all those liquidated assets. Make sure to follow our exclusive technical price analysis articles on HiExchange Blog to stay ahead of the market.
HiExchange
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