Cryptocurrency experts name the main reasons for the sharp collapse of the $ 2 trillion digital asset market

In early July, the cryptocurrency market found itself in a difficult position. Many of the leading cryptocurrencies, including the market’s flagship BTC $62,381.60 Bitcoin 0.37% Market capitalization $1.23 trillion VOL. 24 hours $0.44 billion , experienced a sharp decline. The first days of the month were marked by two major shocks: first, about $ 130 billion of capitalization was removed from the market in one day, and then almost the same amount disappeared in 60 minutes, Finbold reports.

As a result of the fall, the total capitalization of cryptocurrencies fell below $ 2 trillion for the first time since the end of February and as of July 5 amounted to $ 1.96 trillion. This drop has affected not only bitcoin. The total market capitalization of cryptocurrencies, excluding the main digital asset, fell by about $ 150 billion — from $ 1.03 trillion on July 1 to $ 880 billion as of Friday evening, July 5. It should be noted that according to the analytical tracker CoinMarketCap, as of the morning of Saturday, July 6, the market capitalization is showing a recovery of more than 3% and reaches $ 2.06 trillion.

Although trading in the morning sessions on July 5 gave hope for a possible market recovery, this trend did not guarantee the end of the decline in digital assets. Bitcoin tried to return to the $ 55,000 level after being below this mark for several hours. However, market stability remains at risk due to potential sell-offs by investors who receive compensation from Mt. Gox and the German government.

The fate of bitcoin and other cryptocurrencies in the coming days will largely depend on how serious the threat from these sales will be. In addition, expert Peter Schiff believes that BTC will not face significant selling pressure from investors who have invested in exchange-traded funds (ETFs) until the price drops below $ 38,000.

At the time of writing, the flagship asset is trading at $ 56,536 with a market capitalization of $ 1.1 trillion. Traders have executed daily trading deals worth $ 39.7 billion. BTC’s market share is 53.9%.