Saturday the 4th of December, 2021 brought a crypto crash that impacted the global crypto economy subsequently.
If one looks at the causes of the crash then the first reason, which comes into the mind, is associated with China.
The Republic of China has completely disowned the crypto industry on Saturday. It was informed to the public that from now on there is no place for any digital currency in China, except for “digital Yuan”. In addition, the Government of China also entirely banned mining activity. None of the digital currencies, including the miners, would now be able to survive in China in these circumstances. This was the final blow that China had delivered to the world of digital currencies.
Because of China’s initiative of disowning cryptocurrencies, the global crypto economy is now reduced by 17%. Most of the impact was faced by none other than Bitcoin who lost value @ 30% on Saturday. It is widely believed that the crypto economy’s upward and downward movement relies on Bitcoin. So the present crash jolted the Bitcoin economy as well as other cryptocurrencies, which have grown in more than thousand.
As a result of the latest Bitcoin crash, the hopes of witnessing the Santa Claus rally seem to have ended now. Instead, Bitcoin is struggling to stabilize its base value, its trade volume, and its market capital. By this time, Bitcoin’s market cap has fallen from US$ 1 Trillion plus to under US$ 900 Billion. After losing value by 30%, however, Bitcoin started to show some resistance. However, even the resistance was not good enough which could have brought the value back to its pre-crash status. Yet, Bitcoin has been able to grasp some portion of the lost value and has now settled at the value of US$ 48,000 plus.
Once again Ethereum was seen giving a tough time to the crash. Ethereum too faced the value decline but was sharp in rebounding. Since the crash, Ethereum has already recovered most of the declined value and is falling short of US$ 200 towards full recovery. The asset’s value declined by 14% but it was its weekly progress that kept Ethereum from withstanding the crash. If the present decline is compared with Ethereum’s one-week surge, then Ethereum has lost only 2% value.
Amongst the top 10 leading cryptocurrencies, Dogecoin and Polkadot too had seen massive value reduction. Dogecoin lost more than 20% in the value while Polkadot loss was about 22%. However, they both have been failing to recover some part of their values.
Considering prevailing crypto market conditions and the fact that the market continues to crash, it is difficult to suggest that the rally still remains. However, in the view of crypto community members, the rally is still intact. The fall will not last longer than a week. They are in fact optimistic that a major surge is due before the start of 2022.