The cryptocurrency market may face a massive spike in volatility after liquidity leaves the market on US Memorial Day. Research firm Fundstrat has released a detailed report for this prediction that could impact the Bitcoin and altcoin market.
Crypto market may crash on this date
According to Fundstrat, which provides market strategy and industry research, the cryptocurrency market is preparing for more volatility and downward movements, so investors should keep their portfolios in check. should rethink and take action against the possible downturn of the market. Fundstrat’s Sean Farrell advised investors to buy put options for the long positions they hold in their portfolios and reduce investing in speculative altcoins. His outlook on the market is due to abnormally low liquidity and a potential increase in liquidity over the Memorial Day holiday.
Farrell expects things to get “strange” over the coming holidays as the market faces low liquidity, increased leverage and tightening monetary conditions. Statistically, the Memorial Day holiday is followed by low liquidity and non-existent volume in the market. As the market becomes leveraged, we may see a situation where the market is facing a spike in volatility due to lack of liquidity.
Bitcoins and altcoins returned a large share of their volume
In 2020 and 2021, cryptocurrency market volume fell 43% and 35% respectively, which is this year’s It also indicates that market activity will remain at an extremely low level. In anticipation of Memorial Day, the cryptocurrency market remains heavily under pressure from long-term investors selling pressure on cryptocurrencies like Ethereum and Bitcoin. Unfortunately, the market has yet to recover from the sell-off caused by the unpinning of the UST stablecoin and the Terra disaster in general.
What happened in the Terra ecosystem?
TerraUSD has seen a loss of stability against the dollar with large withdrawals, general concerns about cryptocurrencies, and steady decline in prices. Terra’s developers also bought billions of Bitcoins to secure the reserves. However, no measures were sufficient for LUNA and UST. A Blockchain is being built with Terra 2.0. As Kriptokoin.com we have covered the details in this bulletin.
