What is the current situation of the cryptocurrency market? Is a new fall coming?
In recent days we have only seen bitcoin fall, despite having very encouraging news, even historical, such as the decision made by the Congress of El Salvador to adopt bitcoin as legal tender, the reality is that the answer is not It has been as expected, to the point where many speculate that there will be a big drop in the market due to various events that are just around the corner.
The case of El Salvador has not gone unnoticed and has not left the large banks and financial institutions very happy, which is why it did not take long for various attacks against bitcoin to be orchestrated and one of the first to speak out was the International Monetary Fund, which ensured that this change could lead to financial and legal problems. The spokesperson for said institution said during a recent press conference "Adoption of bitcoin as legal tender raises a number of macroeconomic, financial and legal issues that require very careful analysis"
In a few words, they did not like this news at all, since the institution is in charge of lending money to countries in need, by leaving said loan to them, they would have that country under their control and supervision, for which it is more than clear that they do not want to lose that power.
The magnitude of the problem is such that they have agreed to meet with Nayib Bukele, president of El Salvador, we assume that to make him "change his mind", although it is already a bit late. What they can do is give a warning to other countries that are thinking of taking the same steps.
On the other hand, Elizabeth Warren, senator of the United States Congress, published a video on her Twitter account in which she harshly criticized bitcoin, its lack of security, the damage it does to the economy and the environmental problems it generates. But the criticism was immediate, for example, there are other problems that are equal or worse, for example the pollution generated by the lithium mining that is used for the production of Tesla vehicles and the labor exploitation received by thousands of workers who dedicate themselves to these jobs, in fact, according to Yahoo Finance, the annual pollution from gold mining is more than double that produced by bitcoin mining, not to mention the energy used by the global banking system, which is even higher.
We also saw how the former president of the United States Donald Trump said that bitcoin is a scam and a threat to the dollar, so they should regulate it.
But despite all the attacks on bitcoin, its value has hardly been affected in the last week.
There are two possible reasons why bitcoin and other cryptocurrencies would be in danger:
This weekend the G7 summit was held in the United Kingdom, where Biden made it clear that one of the points he wanted to talk about was cryptocurrencies, their relationship in the Colonial Pipeline attack and other ransomware breaches.
During the early hours of Saturday we saw a correction in bitcoin, from $ 37,000 to below $ 35,000 and since then the market has remained lower for the rest of the weekend.
The second reason why another big drop could be generated is death cross. Since the market began to fall in mid-May, the atmosphere is quite pessimistic and what is already being talked about is this death cross, which already with this name greatly increases uncertainty and fear in the markets and that if it occurred could trigger scare and sell-offs and ultimately lead to a bear market.
It would not be the first time that this phenomenon has occurred, in 2018 bitcoin after reaching a new historical maximum, began its drastic decline until the death cross occurred on March 30 of the same year, followed by a total fall of 70% .
However, the movements in the market are totally unpredictable and even if the past is taken as a reference, you never know what could actually happen, so perhaps the bull market has not yet reached its end and could continue to grow after a few weeks or a few months.