Will crypto go back up? Experts ‘optimistic’ as Bitcoin, Ethereum and DOGE all down

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LUNA fell last week in a cryptocurrency landslide that extracted billions from the market and left millions of investors struggling. The currency collapsed from an all-time high of $116.41 (£94.99) in April, placing it among the top-performing currencies, to $0.0002013 (£0.00016) on May 16. Recent graphs show that LUNA has not recovered from last week’s shock and continues to trend down, but people’s fortunes may soon change.

Will crypto go back up?

The trouble with LUNA sent the cryptocurrency market reeling last week, with a limited impact on other currencies.

As of May 16, several tokens have lost double-digit values compared to last month.

Bitcoin and Ethereum, for example, are down 8.87 percent and 14.57 percent respectively, to $30,005.93 (£24,483.64) and $2,039.22 (£1,663.92).

Altcoins such as DOGE, Shiba Inu and IOTA fared worse, down 24.47 percent, 26.43 and 18.48 percent each.

Marcus Sotiriou, an analyst at UK-based digital asset broker GlobalBlock, said the cryptocurrency market’s attachment to inflation could see it regain ground.

He suggested the recent downturn was due to “fear”, adding there was space to manoeuvre as this passed.

Mr Sotiriou said: “US CPI data from last week signalled that inflation is peaking even though it is not inflecting down as quickly as we would like.”

“Therefore, I think that much of the sell pressure recently is due to fear rather than fundamentals, and that global markets have been pricing in a recession.

“Futures funding rates for Bitcoin are currently negative on many exchanges, showing that the majority of traders in the futures market are short at a key support level, which could lead to a short squeeze if they are on the wrong side.”

Additional investment in cryptocurrency products shows growing “institutional interest” that could help the market support the industry.

Mr Sotiriou added: “Goldman Sachs and Barclays have invested in a crypto platform called Elwood Technologies, owned by British hedge fund billionaire Alan Howard.”

“In addition, Mike Novogratz’s Galaxy Digital and the venture divisions of Commerzbank, the second-largest bank in Germany, participated in the round which values the company at $500 million.

“This is further confirmation of institutional interest in the crypto space.

“Rather than invest in crypto assets themselves, the preferred method for major financial institutions to gain exposure is to invest in the infrastructure which supports the industry.”

Wall Street is similarly optimistic, as Paul Veradittakit, a partner at Pantera Capital, told Bloomberg the exposure to cryptocurrencies would lead some people to see the collapse as a “buying opportunity.”

Is cryptocurrency a safe investment?

While analysts are optimistic the market can recover, cryptocurrencies will remain inherently risky.

The lack of regulation means that people who invest could lose their money without recourse.

The likelihood of losing money is also higher, as cryptocurrencies are inherently highly volatile, as Terra Luna has proven.

The information in this article does not equate to financial advice. Anyone considering investing in cryptocurrency should understand the risks involved.

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