The present week can be declared as a hard week for the Bitcoin digital currency market. That is because, during this week, a serious alteration was established amid the digital currency market. As a result, the value of Bitcoin fell below the $1 trillion mark implying how a total of $13,000 was lost during this time. Following the footsteps of Bitcoin, the entire market experienced a similar trend. NASDAQ also experienced a downfall, whereby their market faced a jolt because of the government-issued bonds. Due to this, the investors preferred businesses that would benefit from the overall economic recovery.
Nevertheless, in both cases, the link between large indices like NASDAQ and the traditional financial markets is obvious. In the previous week, the digital currency market lost $300 billion. However, it cannot be argued that the value of all coins is falling. The Cardano ADA’s value has substantially increased over the week and has managed to overtake digital coins like the Tether USDT.
In fact, Cardona ADA has reached the rank of being the third-largest digital currency through market capitalization. However, an investment fund that is based in Dubai stated that keeping the current values in mind; they will be willing to sell $750 million worth of Bitcoin in order to purchase more Polkadot’s DOT.
On another note, MicroStrategy is still purchasing Bitcoin, notwithstanding its current value. According to the company this week, they will buy Bitcoins worth $1 billion.
Looking at all the perspectives, it can be deduced that the recently acknowledged link was a strong one. Prior to this, no serious connections could be witnessed in the market. As a result, investors could generate maximum profits. Furthermore, to add to the argument, the market was too leveraged, resulting in long liquidations upon the fall of the market.
Some of the reasons that can explain the decline in Bitcoin’s value are that the digital currency experienced substantial “funding stress,” as maintaining a long position in the Bitcoin industry requires a lot of funding. Moreover, the drop could be the result of the decline in Bitcoin’s institutional demand. Lastly, the drop could be due to chart-driven factors. The recent decline was a result of exchanges like Coinbase.