Panic for these 3 cryptocurrencies: Why is Shiba Inu, Ethereum and Dogecoin sinking today?





What happened ?

The cryptocurrency market is experiencing another day of short selling today. Shiba Inu (SHIB -0.81%), Ethereum (ETH 1.99%) and Dogecoin (DOGE -1.01%) token prices lost ground along with the sales momentum. They fell by 5%, 2.1% and 1.6% respectively in the previous 24 hour trading from kl. 10:15 Sunday.

Almost all tokens in the first 100 crypto-currencies have seen sales over the past trading day. In fact, excluding stack coins, only the TRON token was in green during the period. (BTC 2.07%)

So what ?

Investors have been taking money off the table lately and moving away from high-risk investments, which has led to major withdrawals that have affected the overall dynamics of cryptocurrencies and equities. This may interest you: Prediction of cryptocurrency prices: Crypto.com, Ethereum and Solana. To put this trend in perspective, the technology-heavy Nasdaq Composite has just had its worst month since 2008, and rising bearish sentiment is also helping to shape trading in the crypto area.

It is also possible that recent comments by Warren Buffett, CEO of Berkshire Hathaway and Charlie Munger, Vice Chairman of the Board, play a role in this sales movement. Berkshire held its shareholders’ meeting in Omaha yesterday, and executives made sharp comments about bitcoin and the cryptocurrency market as a whole. Speaking of the current market leader in cryptocurrency, Buffett said, “If you told me you owned all the bitcoin in the world and offered it to me for $ 25, I would not accept it. What should I do about it?”

Although the bearish comments from the two Berkshire fixtures are nothing new, it is possible that the pair’s recent round of criticism has had particular resonance under current market conditions. Due to worrying inflation levels, the Federal Reserve is on track to raise interest rates well above current levels before the end of the year, and rising interest rates are usually synonymous with a background that is difficult for speculative investments.

Many investors and analysts have expressed concern that rising interest rates could push the US economy into recession, as with loans becoming more expensive, companies will be less likely to pursue new growth initiatives. The same general principle can be applied to buying stocks and cryptocurrencies. When it is cheap to incur debt, some of that capital goes into relatively risky assets and stocks. When rates are higher, these types of investments generally become less attractive.

What’s next?

In some respects, the current macroeconomic situation is without recent historical precedent to refer to. On the same topic: The UK government plans to seize cryptocurrencies to combat money laundering.. The cryptocurrency market also remains relatively young, making it difficult to predict its performance if economic conditions deteriorate significantly.

The Department of Commerce recently released a report showing that the U.S. economy fell 1.4% year-on-year in the first quarter. Given that the Fed only raised interest rates by 25 basis points in mid-March, the fact that gross domestic product fell unexpectedly during the quarter, while inflation continued to rise, is worrying and may provide a difficult background for cryptocurrencies and other high-risk investments in the future.

While Ethereum provides a blockchain network on which applications and services can be built, cryptocurrencies like Shiba Inu and Dogecoin function primarily as exchange media and speculative assets. This suggests that Ethereum’s Ether token may hold up relatively well if the turmoil continues to shake the broader crypto market, but again, there is not much historical precedent to base projections on.

Bitcoin started the cryptocurrency trend with its release in 2009, but even the current market leader in cryptocurrency did not start to see a significant adoption until years later. Aside from the market-induced pandemic crash that occurred in March 2020, when major cryptocurrencies underperformed stocks before returning to strong gains, there is not much to see when deciding how digital tokens can perform under intense bearish conditions. As such, it is probably best to go ahead and know that most cryptocurrencies are high-risk investments with high returns.

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