One cryptocurrency analyst has issued a warning about the chance of a series response as the cryptocurrency market continues its downward development, shedding $70 billion from its market worth in a single day and being pushed by the drop of its most respected digital asset, Bitcoin (BTC).
Certainly, the Director of Monetary Markets at OKX, the world’s second-largest crypto exchange by spot buying and selling quantity, Lennix Lai, stated that the crypto trade could possibly be in for a “domino effect” very similar to the one the financial market went via in 2008, Night Commonplace reported on August 19.
“The domino effect we’re seeing amongst crypto corporations is akin to the 2008 monetary crash amongst Wall Street corporations,” he stated.
Similarities to the 2008 crash
In accordance to the report, at the very least ten crypto corporations have collapsed or suspended person withdrawals since the yr’s flip, with declining Bitcoin worth claiming victims throughout the panorama, together with the Terra (LUNA) ecosystem, lending agency Celsius (CEL), and others.
Equally, again in 2008, Wall Street companies started dropping one after the different after the housing market collapsed and debtors might not afford to repay their mortgages, overwhelming banks with mortgage losses on their steadiness sheets.
As Lai defined:
“Each instances resulted from establishments taking illogical threat, largely at the expense of investors.”
Crypto bears come out to play
Lai’s warnings arrive as $70 billion is wiped from the crypto market cap in a day, eroding the positive aspects achieved in the earlier weeks, and main cryptocurrency trading expert Michaël van de Poppe to opine that the present market cap is dealing with rejection at a essential resistance stage.
As for Bitcoin, the trade’s largest cryptocurrency, it has lost $30 billion from its market cap in 24 hours, failing to maintain the bullish momentum of the moderate two-month-old price uptrend that Finbold reported on August 15.
In the meantime, Bitcoin was at press time buying and selling at $21,452, representing a loss of 8.8% on the day, and 9.59% throughout the earlier seven days, in accordance to CoinMarketCap information retrieved on August 19.
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