Selling in the cryptocurrency market has stalled, with the President’s Day holiday bringing some respite. The reversal comes amid calls for a crypto winter, an extended lean patch much like the 2018 crypto bear market.
Bitcoin backup box: Bitcoin (CRYPTO:BTC), which on Monday morning returned to its lowest price since early February, is now turning the tide. The crypto apex fell below the psychological support level of $40,000 on Sunday and closed the session at $38,431.38. It saw further weakness early in Monday’s session before paring losses and moving into positive territory.
Stock and bond markets in the United States are closed on Presidents’ Day on Monday. The stock and commodity futures market will be open for abbreviated sessions. Since cryptocurrencies are unregulated, the market trades 24 hours a day, 7 days a week, including holidays.
Crypto trading during weekends and holidays faces the threat of unusual volatility, characterized by wild price swings. Low volume and margin trading are some of the factors behind the huge moves. Crypto investors usually trade on margin, or in other words, money lent by exchanges.
When the prices of crypto assets fall below a particular level, margin calls are triggered. With banks closed on public holidays, investors may struggle to meet margin calls, forcing exchanges to sell some crypto holdings.
After the weakness of the last sessions, Ethereum (CRYPTO: ETH) is enjoying a nice recovery.
Among other major altcoins, Binance Coin (CRYPTO: BNB) gimbal (CRYPTO: ADA) and Solana (CRYPTO: SOL) all turned around.
In the space of coins meme, Dogecoin (CRYPTO: DOGE) increased by more than 1% and shiba inus (CRYPTO:SHIB) outperformed, gaining more than 6%.
Stablecoins, which are backed by the US dollar, continue to trade higher. Attached (CRYPTO: USDT) and USD Coin (CRYPTO: USDC) are seen stagnating or trading slightly higher. Earth (CRYPTO: LUNA) gains almost 8%.
Related Link: This Major US Investment Bank Doubles Its Bitcoin Exposure
Expert opinion on the sell-off: The crypto market slump seen since early November has left many wondering when things will start to look up. The prospect of Fed tightening and the Russian-Ukrainian standoff weighed on the short-term space.
Founder of Ethereum Vitalik Buterin sees another crypto winter as a welcome development, as it will lead to an industry reshuffle. The crypto billionaire said in an interview with Bloomberg that the selloff would ward off projects engaging in market manipulation and incentivize crypto projects focused on improving technology.
Recovery can take years: At least for Bitcoin, a reversal isn’t expected until late 2024 or early 2025, that’s according to From Jun, co-founder of cryptocurrency exchange Huobi. Jun told CNBC that Bitcoin bull markets correlate with the halving, which happens once every four years. The previous halving took place in May 2020.
Bitcoin halving is the process of halving the rewards due to miners after each set of 210,000 blocks has been mined. This is intended to control any exponential increase in bitcoin in circulation, thus keeping prices in check.
When last checked, Bitcoin was seen up 0.87% to $38,564.01.
Ethereum added 3.30% to $2,711.75.
Doge rose 1.17% to $0.138100.
Shiba Inu was up 6.07% at $0.000027.
Related Link: Bitcoin Reigns Supreme, Still Makes Up 46% of Total Crypto Markets Value: Survey
Photo: Courtesy of Jorge Franganillo on Flickr