Is the cryptocurrency crash just the beginning?

For over a month, one of the main topics of talks between investors has been a sharp decline in the cryptocurrency market. Assessing the situation through the prism of recent weeks, it can be said that we are dealing with a real crash.

Bitcoinwhich at the end of March struggled with sellers resistance in the $ 47 region, now costs just over $ 500. In the same period Ethereum, the second-largest cryptocurrency in terms of market capitalization, lost just over 38% of its March valuation. Litecoin price in just 8 weeks it fell by over 42%, Polkadot by 51%, and Chainlink - by over 54%. However, there are assets that have lost even more during the cryptocurrency market crash.

Is the crypto crash just the beginning? 

The price of Bitcoin stopped at $ 30 - the level last tested in late July 000. For many market participants, the test of this level of support is a buying opportunity - investor sentiment continues to indicate extreme fear, which in many cases in the past has led to a rebound and price increases. However, the lack of a strong response from the demand side and the consolidation on the Bitcoin chart that has been going on for several days makes us ask the question, will history repeat itself this time? 

A reading of 12 indicates very weak cryptocurrency market sentiment. In the past, this has often heralded a rebound and a rise in prices. Source: alternative.me

The cryptocurrency market does not operate in a vacuum - companies from the financial and technological sectors are currently associated with digital assets. One such company is strongly correlated with the prices of Bitcoin Coinbase. However, the company's troubles began long before the last cryptocurrency crash. 

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This is not the end of declines in the crypto market (?)

The cryptocurrency exchange Coinbase, listed on Nasdaq, disappointed the market with its results for the first quarter of this year. The company - contrary to investors' expectations - reported a loss of USD 430 million and recorded a decrease in the number of active users by nearly one-fifth. Coinbase, which owns over USD 256 billion in both fiat and cryptocurrencies, also warned in the report that in the event of a possible bankruptcy of the company - users' funds may also be lost. Although Coinbase CEO Brian Armstrong tried to explain the disclosure of risk factors by the requirements of the US Securities and Exchange Commission, reports of the possibility of losing all of his funds were certainly not warmly welcomed by investors. 

Strongly correlated COIN.US and Bitcoin consolidate at local lows. Source: xNUMX xStation. Please note that information and research based on historical data or results do not guarantee future profits.

Both Bitcoin and Coinbase (COIN.US) stocks traded below their long-term averages. In addition, both of these assets are clearly correlated with each other, and consolidation at local lows can be interpreted as buyers' weakness. And although in both cases there may be a correction of recent declines, at the time of a rather complicated macroeconomic situation and such clearly negative sentiment on the cryptocurrency market, the increases may be short-lived.