The falls in the financial markets mark a before and after the assets are exchanged however by using crypto superstar which is why when drastic changes arise, the digital market is not exempt from suffering them.
The digital gold has been drastically affected during 2022; the results obtained have not been as expected, and many investors at the beginning of the year are terrified after the constant fall.
Bitcoin’s benefits during 2021 could practically be canceled after a decrease of more than 50% in its valuation compared to its historical maximum at the end of the year.
The economic phenomenon “Crossing of Death”
It is a phenomenon that usually happens when a set of assets fall precipitously, in this case, digital assets.
It arises after an arduous technical analysis, where investors usually determine the position or trend a digital asset could have in the future, establishing that even these results could be pretty damaging.
Although it is usually extremist, its name is one of the crucial points regarding the price of a digital asset; investors realize that this phenomenon will occur when the digital currency’s price averaged over the last fifty days is below the average price of the previous 200 days.
When this phenomenon usually happens, investors and market analysts generally conclude that the downtrend is set to last for a long time, which does not benefit the digital financial market much.
Once this happens, it is like a safe forecast of the situation to come, and it is there that most investors tend to sell their digital assets and transfer their investments to other types of assets.
Very similar to the situation that cryptocurrencies are currently going through, only that their volatility could take over the market and drastically change the trend.
It is worth noting that the experts, once they carry out this analysis, usually indicate that it is not just a forecast taken lightly, this tool is part of a set of market analysis instruments, but it is a prediction that can vary.
Could there be a crypto war?
The eyes of the world are on a digital ecosystem that, in such a short time, has reached a millionaire valuation but suddenly seems to collapse.
In recent years we have witnessed how products around digital currencies have emerged extraordinarily; no one imagined that levels of popularity could be achieved in the face of a financial product born from nothing.
So much so that many digital currency exchange houses that grew and even increased their payrolls in the face of significant growth in the valuation of digital assets today are in a situation of constant alert.
What is not understood is that this trend has occurred before, and panic had not been generated to the point of blocking account balances and even preparing for a bankruptcy scenario.
That is when macroeconomic factors come into conflict, such as inflation in the United States and the constant measures of the Federal Reserve that seem to be waging an indirect war on these assets from which many have benefited.
Regulatory projects are now expected everywhere, and although it has caused adverse effects on the normal development of cryptocurrencies, it all depends on whether these measures will continue or the time will come when they cease. As a result, a new trend regarding digital assets has been established.
What has caused cryptocurrencies to fall?
There are many factors that, at this point in the economic and financial scenario, have radically affected the valuation of digital currencies; most of them are unrelated to the cryptographic market.
Although the analysis is uncomfortable, the valuation of digital currencies and their drastic decrease is not due precisely to an event about them but rather to the fact that the global economy is going through a situation critical enough to affect a market that seemed untouchable.
It is when many specialists in the area of finance and economics tend to suggest that there is no total separation between the digital market and the traditional one, and the current situation proves it.
Most investors are trying to shelter their capital in safe areas where they do not necessarily have to take such extreme risks as with digital currencies.
Conclusion
The panic invading investors is a reality that is not foreign to many, but after the downward trend that cryptocurrencies are experiencing, everything could change and suddenly be favored; only investors who decide to wait and keep their investments long will be the ones so you can see the final results.