The cryptocurrency market lost more than $9 billion in only a couple of hours after the price of several tokens and small market cap cryptocurrencies dropped.
After the relatively strong rally which saw some tokens even rise from 30% to 50% in 24 hours, the crypto market corrected and saw a decline in the value of tokens. Some of the most affected coins in the new drop were Nano, Zilliqa, and Aelf – which dropped by 18%, 13%, and 12.9% respectively.
Currently, the analysts believe that the decline in price was triggered by the strong recovery of the market which “needed to correct”. One expert crypto trader and FX market maker named Alex Kruger commented on the situation, stating:
“BTC was rejected at $6,600 and the whole crypto complex fell like a house of cards (-10%/20% this morning). A strong bounce out of massively oversold levels does not indicate a new bull run has started.”
He also said that the majority of the traders in the crypto sector mistook a minor corrective rally that was formed by strong oversold conditions in the crypto market for a bull rally. This made them expect that the market will perform better than its recovery in the first place.
If we go back to yesterday’s price situation, the price of VeChain increased by 90% at one point against the US dollar in only 24 hours. As analysts say, a market recovery from such a bullish run is always normal.
Over the next few days, analysts expect that the Bitcoin will further stabilize at $6,400 – at least for a couple of days – before another bullish rally is initiated. Currently, the volume of both Bitcoin and Ethereum remains equal to its July levels.
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“The first one is that it can support multiple collateral types. This, of course, means ERC-20 tokens. It also means Bitcoin through WBTC. A range of cross-chain assets that are emerging now. Also, there will be other stablecoins. Centralized stablecoins that already exist on the Ethereum blockchain. But most importantly, security tokens.”The MakerDAO foundation initially owned all of its MKR tokens but as Rune explained, they sold them off to multiple huge players in the EthereMum world in order to fund teams of 100 people. He says that MKR exists only to be able to vote in the system. The system rewards people who hold CDPs and when everything goes well, the MKR total supply is reduced, tokens get burned off and the value of the remaining tokens increases. Dai is extremely unique and some consider it as the real stablecoins, unlike the pegged coins. Dai is built on an open system so people who invest in cryptocurrency can access the stability of the Oracle system. Christensen also explained how real security tokens operate better in the world of traditional assets. He said:
“Security tokens are still something that is quite new. But what that really represents to Maker is the ability to now interact with real-world assets. The ability to interact with real-world finance and provide arbitrage opportunities between the traditional finance world and the tokenized world. That means that in the future the Dai will not just be backed by volatile cryptocurrencies, but things like real estate, bonds, and stocks.”The most important way to use Dai is as a stablecoin. If anything happens to the Ethereum network, there could be some negative consequences to the market but MakerDAO couldn’t get in a worse position than the one last year.
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