Stay Connected

Follow NFT Magazine

© 2022 NFT Magazine
All Rights Reserved

Latest News

Recovery of Bitcoin, ETH, BNB, XRP, Solana, Cardano, Luna, Shiba Inu, and Dogecoin Leads to Massive Crypto Dump

Josh King "JetSet" Madrid

Josh King "JetSet" Madrid

Crypto faced rollercoaster changes over the last few months, but it ended on a high note in the July market update. Over the past 24 hours, the prices of significant digital currencies accelerated– bitcoin at 7.8% to $22,900, ethereum adding 11.2% and trading at $1,600, XRP up by 5.8%, Solana by 8.2%, Dogecoin by 6.2%, Shiba Inu by 5.7%, BNB by 5.6%, and Terra’s Luna 2.0 at 4.9%.

Despite the rise in prices, crypto has not escaped the effects of the massive liquidations from institutional investors, which began after the Terra-Luna collapse. There are still quite a lot of factors keeping the lid on crypto, with analysts emphasizing that they are not off the hook yet.

In a July 2021 Twitter thread, Vetle Lunde of Arcane Research said, “236,237 BTC. That’s the amount of known selling of bitcoin since May 10th by large institutions.” He added: “The number does not account for natural capitulation and hedging activity that usually occurs during crypto bear markets.”

Terra’s Luna Foundation Guard was the most prominent of the sellers, selling 80,393 bitcoin. However, the large bulk of liquidation failed Terra’s attempt to defend its TerraUSD peg. Following Terra was Tesla, which dumped over 29,060 bitcoins in an effort to “maximize cash position.”

With big crypto holders dumping large amounts and going back to fiat currencies, experts have identified two reasons behind the liquidations. The first one is Terra’s impulsive move. Second is the Fed’s battle with global inflation.

Terra’s crash most likely made investors realize that the crypto market is a web capable of causing domino effects. This sparked fear of a possible crypto collapse. Goldman Sachs even released a letter warning investors of the interconnection of DeFi platforms and how they “amplify systemic risk” as one big institution.
On the other hand, the Fed has been gasping for air due to the aggressive rate hikes, among the biggest since 1994, and is nearing double-digit inflation. As crypto analyst Dan Runkevicius said, “Major cryptos are highly correlated to the stock market. They also have a high beta for stocks. That means crypto, in effect, amplifies stock moves. If stocks soar, cryptos soar higher. And vice versa. If stocks tumble, crypto goes into free fall.”

Furthermore, the US real GDP dropped 1.6% in the first quarter of 2022, with the second quarter hinting negative this Friday and talks of an official recession already taking place. Crypto also faces more uncertainty as major central banks across the globe double down on rate hikes. The biggest war Europe has ever seen since WWII also looms over the global supply of food and energy, causing inflation everywhere.

Amid the tension and the black cloud shrouding the crypto market, Blackrock’s Rick Rieder recently comforted investors in an interview where he said, “I still think bitcoin and crypto are durable assets. It’s a durable business, but there was so much excess built around it. I think there’s a healthy recalibration going on.” He continued: “My sense is like a lot of assets, if you look two to three years hence, they will be higher than today.”

Top Crypto CoinsView More