What to expect from cryptocurrencies🤔

Bitcoin has fallen in price by 10% over the past three days. Now the digital coin is trading at $35.5 thousand. Why can the main cryptocurrency restore its position and break the $40,000 mark in the coming days?

This week, the value of bitcoin rose above $40,000, but the coin failed to gain a foothold at this level. The cost of the main cryptocurrency has been declining for the last three days.

Altcoins also fell in price during the same period. For example, Ethereum fell in price by almost 10% in three days. Binance Coin's rate fell by 6%, and Cardano fell in price by 7%.

At the moment, the balance of supply and demand is maintained in the market, no one is in a hurry to sell, which supports bitcoin, but buyers are still timidly gaining positions, explained the financial analyst of the crypto exchange Currency.com. According to him, a situation where the forces of sellers and buyers are in balance is called an effective market or sideways.

To determine the further trend, markets lack any positive or negative information, says the Analyst. He believes that the market is waiting for the actions of large participants who will either start buying bitcoin aggressively or get rid of it.

The value of bitcoin began to decline sharply after the Fed announced that rising inflation in the United States could trigger the regulator's intention to raise the rate. In the coming days, it is possible to rebound after reacting to the regulator's statements and bitcoin may rise to $41-42 thousand.

But this will be short-term growth, because nothing fundamentally changes for the cryptocurrency market - central banks and governments of developed countries continue to show negative attitudes towards digital assets and the intention to strengthen market regulation.

We can say that the growth cycle for the crypto market is complete, as the offensive on cryptocurrencies by the largest states (China, USA, Great Britain) is just beginning. In the future, the pressure on the crypto market will only increase.

The reason for the decline in altcoins is a decrease in investor appetite for excess risk, the financial analyst believes. In his opinion, altcoins, as in previous cycles of crypto market growth, have fulfilled their mission to date, yielded a lot of X, gave a new hype, and also helped a certain circle of people get rich.

Now the bulk of investors in altcoins and hype projects are simply transferting capital to fiat and other much less risky assets, of course, this does not mean that growth has stopped

Some altcoins will show growth, but the altcoin season, when the entire digital coin market is growing, will no longer be anytime soon, alternative digital coins depend heavily on the rate of bitcoin, and its rise this week provoked capital outflows from altcoins.