There are fears the cryptocurrency market is entering a bearish phase following large-scale losses since the weekend.
Bitcoin, currently around $31,500, has fallen to its lowest level in almost a year, with other coins also dropping day by day.
The bloodbath may not end any time soon, according to Eloisa Marchesoni, amid a sell-off which recently saw $1 billion of assets liquidated in just 24 hours.
The American is a respected crypto entrepreneur, tokenomics expert and international blockchain speaker who, at 23 years of age, has already advised over 35 startups and exited four FinTech companies.
“Due to the rising inflation, most investors have taken a risk-off approach, selling both stocks and cryptos. Until the market starts adjusting to these new monetary conditions, I do not think Bitcoin will lead the crypto market up again,” Marchesoni explains.
In seemingly contradictory fashion, the market is experiencing a decline even as the adoption of crypto continues to grow.
“Increased institutional adoption of crypto has had a downturn: it made the crypto market more intertwined with the stock market,” she continues. “Stocks fell sharply Monday, as the market sell-off continued after the US Federal Reserve announced its biggest interest rate increase in over 20 years last week.
“Bitcoin and crypto in general have become extremely correlated to stocks lately. Both the crypto and stock markets have been experiencing lots of downward pressure due to investors struggling with rising inflation, the global economic difficulties caused by Russia’s invasion of Ukraine, and just a tighter monetary policy by the Fed.
“In the short term, these macroeconomic factors have created extra volatility in the crypto and stock markets. These are times of uncertainty, and such a correlation is normal.”
She expects both crypto markets and traditional finance to continue to slide.
“In my trading strategy, I have some entry levels for Bitcoin set near $22,000, and, from what I am hearing from traders in the stock markets that are in my circle, they are expecting similar plunges,” she adds.