Crypto whales are nowhere to be found
If you thought the stock market is looking bad, just wait until you see crypto prices. Or better yet, don’t — and sleep better.
What’s the big deal? Both the stock and crypto markets are falling nearly in sync — impacted by the fear of rising interest rates.
From their November peaks, Ethereum is down by 54% and Bitcoin by 47% — with smaller crypto assets generally down by even more.
The crypto market is now oversold based on several technical indicators:
- The relative strength index (RSI) on the crypto index fell below 30 — a lifetime low according to CoinDesk.
- Between 0-100: Under 30 is oversold and above 70 is overbought.
At these levels, crypto is seeing low demand from big investors (per CoinDesk) and if they’re not buying — investors can say goodbye to a big rebound.
- At the start of 2021, 2,500 accounts held 40% of all Bitcoin.
- This makes the market more susceptible to large price swings from the buying/selling by these whales.
Is this a 2017 repeat? When crypto prices fell 90% over 15 months? It’s difficult to predict but there are many signs that it’s different this time:
- 2017: Crypto prices were driven primarily by speculation — with most tokens having little fundamentals or real projects backing them.
- 2022: Crypto projects are still driven by speculation but several projects are generating revenue with real use cases — with slow adoption by institutions.
But crypto is still highly unpredictable — and prices could fall even further before they recover. Until market sentiment changes and investors are willing to take risks again — both the stock and crypto market are unlikely to see a major recovery.