The crypto market has witnessed a severe plunge this week, and traders are now wondering if the market has reached its bottom or if another crash is on the horizon. As several macro events continue to shake the industry, the next week is crucial as several game-changing events will take place, determining the crypto market’s movement in the upcoming week.
Volatile Sessions Will Rule The Market
Today, the crypto market witnessed a massive selloff as investors identified risks after the collapse of the crypto-friendly bank Silvergate. Moreover, President Joe Biden’s proposed budget aims to “reduce mining activity” and could potentially subject crypto miners in the United States to a 30% tax on their electricity costs, resulting in a negative impact on the crypto space’s future.
The U.S. jobs data is under close scrutiny by traders, who are looking for signs of strong growth like in January with a low unemployment rate. Recently, the Labor Department released data showing that the U.S. economy added 311,000 jobs in February, with the unemployment rate increasing to 3.6 percent. The gain in jobs exceeded economists’ expectations, potentially increasing pressure on the Federal Reserve to accelerate rate hikes.
This could result in an extension of rate hikes and a 50-bps rate hike announcement this month. However, doubts over the Fed’s monetary policy in the upcoming months will be clarified after the release of U.S. CPI inflation data on March 14.
Hence, a rate hike after 14 March will eventually bring more volatility for crypto assets and lower the demand from investors willing to invest in the sector.
Bitcoin To Determine Next Week’s Trend
If the Fed comes up with strict monetary policies and rate hikes to combat the high inflation rise, it may significantly affect Bitcoin’s price and plunge the asset with another crash to the $15K level.
As of writing, Bitcoin price trades at $20K, with a decline of over 7% in the last 24 hours. The sharp decline in the BTC price chart has forced other assets to witness a similar meltdown. Over the past day, Dogecoin, Shiba Inu, Solana, and XRP have all experienced losses of approximately 10%, 9.20%, 9.50%, and 8%, respectively. The global crypto market also saw a downturn, falling by almost 8% and dropping below the $1 trillion mark for the first time since mid-January to reach $918 billion.
If the crypto market comes across another bad news next week, it may plunge Bitcoin’s price to December levels near $16K, marking another crash for the industry.
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Shayan Chowdhury
Shayan is a digital nomad and a professional journalist. He delivers high-quality engaging articles to Coinpedia through his in-depth research and analysis.
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The crypto market has been experiencing a period of volatility in recent weeks, with some of its most popular tokens experiencing sharp losses. This has caused concern among investors, who are wondering if the market is due for a severe crash in the weeks ahead.
Analysts have been studying the market in an attempt to decipher what the near future holds for traders. So far, opinions have been mixed regarding whether or not a severe crash is imminent. Some analysts are forecasting a strong rebound in the coming week, while others are warning of more volatility and losses ahead.
From a technical standpoint, some experts are of the opinion that the recent losses are likely due in part to a lack of institutional interest in the cryptocurrency market. As such, there is a risk of further declines if institutional investors do not step in and strengthen the market. On the flip side, if institutional investors do decide to get involved, there is a possibility of a strong surge in the market.
Nevertheless, taking a holistic view of the market suggests mixed signals in the weeks ahead. While some tokens may indeed experience further losses, others may post strong gains. This will make it critical for investors to carefully evaluate the market before making their decisions.
For traders looking to invest in the coming week, caution is advised. Sticking to a long-term investment strategy, such as a buy-and-hold approach, is recommended to minimize the risk of losses. Additionally, ensuring that portfolio diversification is in place is essential to mitigate risk, as it helps to ensure that losses from one token are offset by gains from another.
In summary, the crypto market’s outlook for next week is uncertain and could be subject to a severe crash. However, with prudent risk management and an investment strategy that takes into account the inherent uncertainty of the market, investors may be able to navigate the market successfully.
