2022 has been a tough year to be a bullish investor, but it’s been an even tougher year to be a crypto investor… 

Since peaking back in November of 2021, the crypto market has steadily slid lower and lower. This culminated yesterday in one of the biggest drops the crypto market has seen this year. 

Yesterday, while the majority of the stock market sold off due to inflation jitters, bitcoin dropped about 16% while ethereum dropped around 19%. Talk about a steep drop… 

And the action isn’t any better today. Currently, bitcoin is down by about 4.5% and ethereum is off by around 2%. 

At these levels, we have both bitcoin and ethereum sitting under their respective 18-month lows. 

Was this all thanks to inflation? The short answer is no. 

While some of the selling can certainly be chalked up to risky asset offloading as a result of inflation fears, a majorly used crypto lender announced a freeze on withdrawals, swaps between cryptocurrencies, and transfers between accounts “due to extreme market conditions.” 

As I’m sure you can imagine, this sent the prices of many cryptocurrencies into a complete freefall. 

The service in question is Celsius Networks LLC, which manages about $11 billion in crypto assets. 

Shortly after, another major crypto exchange, known as Binance, put a halt on bitcoin withdrawals as well. However, around 8 a.m. EST, the company announced this was due to a technical issue and withdrawals could resume in 30 minutes. Withdrawals didn’t actually resume until around noon EST. 

Situations like this tend to add new levels of fear that shake confidence in the market. A similar situation is one that we saw earlier this year with the collapse of stablecoin TerraUSD. 

These incidents even go as far as to fully reverse the extreme enthusiasm traders had for crypto during much of 2020 and 2021. 

Given the “online” nature of cryptocurrencies, a lot of crypto confidence is uniquely related to social media buzz. When withdrawal halts and coin crashes happen, crypto enthusiasts usually post their takes to Twitter, where plenty of discourse is bred which can further affect confidence in the market. 

Are we looking at the end of crypto? Probably not, but crypto bulls have a lot of ground to make up before confidence in the market can start to turn around. 

Of course, nothing is impossible in the extremely volatile world of cryptocurrency! 

To a bright future,

Ray Blanco
Chief Technology Expert, Technology Profits Daily
AskRay@StPaulResearch.com