Bitcoin, Ethereum, Dogecoin Slide — Analyst Suggests Other Factors Contributing To Crypto Carnage Beside Evergrande Woes

Major coins dived into the red Thursday evening as the global cryptocurrency market cap decreased 5.63% to $2.26 trillion.

What Happened: Bitcoin BTC/USD dropped 3.6% to $48,741.25 over 24 hours. The apex coin has fallen 14.39% over a seven-day trailing period.

The second-largest coin by market cap, Ethereum ETH/USD, dropped 6.06% to $4,186.22. Over the last seven days, it has fallen 7.96%.

Dogecoin DOGE/USD was down 3.6% to $0.17 over 24 hours. For the week the meme cryptocurrency has fallen 17.91%.

DOGE-rival Shiba Inu fell 4.57% to $0.00003544 over 24 hours. In a seven-day period, it has lost 15.49% of its value.

IoTex, Unus Sed Leo, and Huobi Token were the top three gainers, according to CoinMarketCap data.

IoTeX was up 12.33% at $0.1285, Unus Sed Leo rose 2.46% to $3.70 and Huobi Token rose 1.22% to $10.06 in the period. Another notable gainer in the time frame was XRP, which rose 1.3% to $0.876.

See Also: How To Buy Bitcoin (BTC)

Why It Matters: The bloodbath on the cryptocurrency markets took place in the backdrop of China Evergrande Group EGRNF not making good on a debt obligation. The company defaulted on more than $1.2 billion worth of bonds, as per Fitch ratings Thursday.

Bitcoin’s decline on Evergrande default evoked increduility on cryptocurrency Twitter. 

Bitcoin also continues to be under pressure as the greenback continues to exhibit strength. The dollar rose against all G10 currencies except the safe-haven Japanese Yen. The dollar index was up 0.3% at $96.233 on Thursday, as per a Reuters report.

Edward Moya, a senior analyst with OANDA, noted another factor responsible for Bitcoin’s downward movement.

“Some of the selling pressure is also related to the growing electric shortages in Kazakhstan, which is taking away mining power from the world’s second-largest Bitcoin mining country. In the past, when China had outages, we saw significant drops with Bitcoin.”

Bitcoin needs to overcome “growing expectations for a stronger dollar,” an “extended altcoin season” and “short-term bearishness” in the wake of COVID-19’s Omicron variant’s spread, as per Moya.

Meanwhile, Ethereum’s “Arrow Glacier” upgrade went live on Thursday. The upgrade supports Ethereum’s transition to a “proof of stake” model and pushes back the so-called “difficulty bomb” to June 2022, as per a project blog.

The difficulty bomb is a planned exponential increase in proof-of-work difficulty designed to motivate a shift to proof-of-stake and reduce the chances of a fork.

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