Looking at the ups and downs since the start of April, the market seems to be at its lowest mark for 2022.
Traders’ confidence was severely damaged by the Terra Network breakdown in May, which led to a significant drop in the price of cryptocurrencies.
The 3AC Liquidation Was A Terrible Setback For The Crypto Space
A significant pullback in cryptocurrencies occurred due to the decline of individual investors and the cryptocurrency mining ecosystem. The crisis has just become severe with the unexpected closure of Three Arrows Capital (3AC).
Moreover, JP Morgan’s Nikolaos Panigirtzoglou claimed that 3AC’s decline is a sign of a continued economic contraction for 2022.
According to reports, Nickolas further said that the liquidity crisis in the cryptocurrency market, which peaked lately, might be coming to an end.
How Long Until The Crypto Sell-Off Ends?
According to Panigirtzoglou, several pieces of evidence, such as the total leverage index, indicate that the liquidity crisis seems to be well established in the crypto world.
As per Sam Bankman-loan Fried’s suggestion to BlockFi, crypto companies with improved economic profiles pitching in to assist the limitation of transmission are thought to be beneficial to the industry. Accordingly, BlockFi agreed to a $250 million revolving credit arrangement with FTX in June.
According to the JP Morgan researcher, the capital flow has been maintained at a robust rate of approximately $5 billion in May and June.
Considering the current prices, Bitcoin has declined by up to 58% in the last three months. It created chaos for speculators, falling from roughly $46,600 in early May to a low of $17,774.
At the time of reporting, Bitcoin is changing hands at $19,522 with a slight surge of 2.37% in the last 24hrs.