Cryptocurrencies: why does Bitcoin fall?
1. Cryptocurrency meme
The market continues to suffer from the effects of congestion caused on the Bitcoin blockchain by the buying frenzy of meme cryptocurrencies such as PEPE Coin (PEPE). This caused Binance, the world’s largest crypto exchange, to be forced to close BTC withdrawals, causing the leading cryptocurrency to collapse.
For his part, Paul Eisma, director of trading at XBTO Group, believes that The world’s largest cryptocurrency “will be fine in the long run” and that the strength shown since the beginning of the year is a good indication, especially if one takes into account that it is in a clear growth phase of the technology. “Like any young, emerging technology that receives updates and modifications, this is part of it. This is part of the growth and evolution of the network, and the path is not straight”, he added.
2. Expectations for inflation
The markets’ reading of April inflation in the US could be defining the next move by the Federal Reserve (Fed). Consensus expects year-on-year inflation growth to remain unchanged from the previous month and there to be another drop in core inflation.
“If both the CPI and the US PPI (producer price index) meet what is expected by analysts, we believe that this will be very well received by the markets. Conversely, if inflation proves to be more resilient than estimated, the idea that the Fed should continue raising its interest rates will once again take holdwhich will cause tensions in the bond and stock markets”, commented Juan José Fernández-Figares, director of analysis at Link Securities.
From a technical point of view, Javier Molina, Senior Markets Analyst at eToro, indicated that Bitcoin “maintains the support that we indicated at USD 26,500-26,800”. From there, the queen cryptocurrency has staged a “failed attempt” to exceed $29,000 and has returned to the consolidation range. “Losing the 26,500 implies going to look for the 25,000. Above, you have to exceed 29,000 to try to go back to search for a maximum zone of 31,000 dollars,” he said.
3. The bankruptcy of another new exchange
Crypto exchange Bittrex filed for Chapter 11 bankruptcy protection in Delaware on Monday, May 8. This comes a month after the Securities and Exchange Commission (SEC) accused him of running an unregistered exchange in the United States.
It should be noted that the company had assets and liabilities with an estimated value between US$500 million and US$1,000 million and more than 100,000 creditors in a court filing.
Bittrex Malta Ltd., and Bittrex Malta Holdings Ltd., also filed for bankruptcy protection in the United States Bankruptcy Court for the District of Delaware.
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