Cryptocurrency Market Struggles
The total cryptocurrency market capitalization took a hit in the past few days, dropping 8.1%. A weekly close below $825 billion could potentially confirm a shift to the lower band, reducing the support level to $790 billion.
Altcoins, in particular, have been facing pressure from pending regulation and fears that major exchanges and miners could be insolvent. The central bank of the Netherlands recently issued a warning to investors using KuCoin, stating that the exchange was operating without legal registration and offering services and custodian wallets illegally.
Adding to the uncertainty, Mazars Group, a company known for its proof-of-reserve audit services for crypto companies, reportedly removed recent documents detailing exchange audits from its website. This has raised concerns about the transparency and stability of some exchanges.
The Bitcoin mining sector has also been struggling, with rising energy costs and a correction in cryptocurrency prices adding to the challenges. Publicly-listed miner Core Scientific was even offered a $72 million contingent emergency credit line to avoid bankruptcy.
Despite the bearish sentiment in the market, demand for leverage is currently balanced between bulls and bears. The number of Bitcoin longs on Bitfinex has decreased, while the number of shorts has increased. Meanwhile, the number of Ethereum longs on Bitfinex has increased, while the number of shorts has decreased.
It's important for investors to stay informed and carefully consider their investment decisions, especially in a market facing regulatory pressure and uncertainty about the stability of some exchanges.
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