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Historically, the crypto market led by Bitcoin and Ether has been characterized by high volatility in both directions of the market.
Bitcoin (BTC) and Ether (ETH) prices dropped further over the week, hitting new lows since mid-July 2021. According to market data provided by Binance-backed Coinmarketcap, Bitcoin price traded around $35k at the time of reporting having dropped approximately 18.30%, and 1.89% in the past seven days and 24 hours respectively.
Ether price on the other hand was much worse as the asset traded around $2,390, after shedding approximately 27%, and 4.73% in the past seven days and 24 hours respectively.
The total crypto market cap is down approximately 3% in the past 24 hours and stands at around $1.60 trillion. Notably, almost $1.6 trillion has been liquidated from the crypto market since setting an all-time high in November last year.
Despite the crypto shakeout, El Salvador continued with its dip purchase last week. The country, according to President Bukele, purchased 410 more Btc units for $15 million. Notably, the country now holds approximately 1,500 Bitcoin units that were purchased in the past market dips.
The country leads institutional investors that continue to put more money in the crypto market to hedge against increasing inflation fears. Furthermore, the past two years have been characterized by notable cash printing led by the United States that handed out trillions as stimulus packages.
“One of the bullish drivers for crypto over the last two years has been the surplus of pandemic-related fiscal and monetary stimulus globally, and much of that is coming to an end,” David Duong, head of institutional research for the big US cryptocurrency exchange Coinbase, wrote Saturday in a report.
Bitcoin, Ether, and Crypto Dip
Historically, the crypto market led by Bitcoin has been characterized by high volatility in both directions. Thereby attracting investors with a high appetite for volatile markets to make the most out of it. However, huge movements have liquidated most investors due to unexpected movements. Moreover, the crypto industry is still heavily reliant on speculative aspects and largely controlled by whale traders.
Notably, some analysts expect the crypto dip to continue in the next few years as more countries led by the United States step in to regulate the market. On a long-term scale, the 2024 Bitcoin halving is expected to shift the buying pressure as global adoption widens, particularly at the country level.
Nevertheless, the crypto market is capable of quick reversals as observed in the past. Moreover, Bitcoin has not broken its long-term rising trend of higher highs and higher lows on the weekly BTCUSD chart.
“The market is holding its breath as investors look to the opening of the Asian markets for a sign of what equities will do this week,” Joe DiPasquale, the CEO of crypto fund BitBull Capital told CoinDesk. “If Asian markets open strong, we can expect demand for crypto to go up, and even more so if the U.S. markets have a strong Monday.