There are so many reasons and opinions on Why the Crypto price is dropping. In this article, I will share some facts and opinions on the reason for the drop in the cryptocurrency price.
Cryptocurrency has always been very volatile but as of late with such high prices, it is just a lot more noticeable and painful if you are the one that bought in at the top of the candle.
The Uptrend of Crypto
Crypto has been running a very large uptrend in value this year. Everyone was buying in. I know a lot of people that jumped out of the stock market and spread all the money in the Crypto world. There was a lot of positivity in the market. New crypto was being made daily. Some of the cryptos actually had a reason to bring value based on the blockchain that can be used in so many applications. Some, on the other hand, were almost useless but people were buying them like candy.
Beginning of the Crypto Market Volatility
The volatility started with a guy named Elon Musk. Some of you may know him. Those of you that do not, well, get out from under the rock you have been living under. Elon was a big pusher, to begin with, the push-up in the Value of Bitcoin when Tesla decided to buy a large amount and release that they will be accepting Bitcoin as payment. Then Elon began to pump the Meme Dogecoin Rocketing it to the moon like an astronaut on a SpaceX Rocket.
All of a sudden Elon Musk’s head popped out of his ass and light was visible. Wait Bitcoin uses electricity to run its blockchain. It’s running on dirty power, Tesla can’t condone that. I really have to ask a question here. Who invests $1.5 billion in something without knowing how it operates? This pump and rejection was the start of the downward trend.
Now throw China in the picture and all the regulations that they are putting in place to stop crypto mining and people from investing in crypto and you have just caused a major landslide on an already down-trending market.
Elon Musk continues to send Tweets that go poorly for the market pulling it back and forth and China continues to crush everything including China company stocks on the US exchange.
Other Potential Reasons for the Crypto Market Crash
There is a lot of speculation for other reasons contributing to the downfall of the market. These are my opinions based on what I believe to be Facts.
Have you seen what the stock market has been doing? Some of the massive runs on the Short Squeezes like GameStop $GME and AMC Entertainment $AMC. Buying in on a stock at a few dollars and watching it run up to $400 + dollars in a matter of a couple of months. $GME started this initial pump-up. I also spend a lot of time tracking the stock market as well as Crypto. I jumped into AMC around the $12 per share mark and within 4 weeks it had skyrocketed to $72 before slowly trending back down. That was an amazing profit in such a short time. Still holding AMC stock for the cause so I didn’t get full cash in but it made me start doing a lot more research and reading a lot more social media.
So how does the stock craze impact the crypto market you ask?
A large number of retail investors going after the hedgies and creating short squeezes needed money. I have talked to several that pulled their money out of Crypto to invest in these short squeezes. You can find it posted all over social media. Large Corporations have major losses due to shorts that they need to cover. They have been liquidating stocks to cover and I would assume Crypto also if these assets are in their portfolio.
The focus of a large number of everyday retail investors is going hard after the short squeeze rush. I can’t blame them It is an absolute blast, amazing community and the rush on some of these to buy a stock at $2 and watch in run over 2 to 3 days to $10,$20,$40, and More. It is an amazing Rush.
Do I Believe AMC and GME Caused the Crypto Crash
Well of course not. I still blame Elon. I have become an Anti-Musker.
The crash started with Elon and China. As retail traders began to lose faith in the Bullish crypto Market and News about $GME spread Crypto was sold and the stock market was entered.
After massive amounts of research and fact-finding, the Short Squeeze craze really became a Stop the manipulation and corruption movement. The market will eventually change and the Short Squeeze will trend down. With the retail trader losing Faith in the Stock system I believe they will move back to the Crypto Market. If the SEC does their job and you really see that major squeeze and wealth transfer there will be mountains of money to bring back to the Crypto Market.
The Crypto Market is still young and volatile. As crypto, because more of a norm I believe it will calm down more, and moves by a single company, person or country will not have the same impact.