In the trading year to date, June 2022 has seen a second crypto meltdown.
The fall of Terra Luna in May knocked $500 billion off the cryptocurrency market. Nearly $400 billion has departed crypto so far in June 2022, with the industry market cap falling below $1 trillion for the first time since January 2021.
Many crypto investors may have believed that buying the drop on May 12 was the best option. The price of Bitcoin had dropped from $40,000 to $28,000 at the time. However, if you bought at $28,000, you’d be 30% down on your investment today, as Bitcoin barely holds above $20,000.
All of this begs the question: is now the moment to purchase the dip before the second crypto crash in 2022?
Why is the cryptocurrency market collapsing once more in June 2022?
While the first crypto disaster was arguably driven by the depreciation of UST from $1, the second crypto crash is mostly due to macroeconomic factors.
Following a report last week, the Consumer Price Index (CPI) put inflation at 8.6% in May. The Dow Jones Industrial Average fell 900 points as a result, and the S&P500 entered a bear market.
Inflation is at its greatest level since 1981, which caused the Nasdaq composite to drop 4.68 percent.
The price of Bitcoin fell from $27,000 to $22,000 on Monday, June 13. Bitcoin’s price declines continued into June and into June 15, with the currency trading at a low of $22,180 as of today.
Celsius, a lending and staking network, froze nearly $11 billion in assets on Monday as a result of dropping crypto prices. Coinbase, the largest crypto trading platform in the United States, revealed on Tuesday that it was cutting off 18 percent of its full-time employees.
Crypto is plummeting once again in June 2022 due to unfavorable crypto news and gloomy market conditions.
Should you take advantage of the current Bitcoin price drop and purchase the dip?
Bitcoin’s trading signs are arguably good.
Over a 14-week period, the Bitcoin relative strength index (RSI) is currently at 26. This is the lowest RSI since at least 2018, implying that Bitcoin is currently oversold. Bitcoin has also dropped below its 200-week SMA of $22,350.
Both of these key signs show that Bitcoin is a good investment at the moment. However, determining the Bitcoin bottom is difficult.
The Federal Reserve of the United States is hosting a meeting that will end today, June 15. Increases in interest rates are projected to follow. These could increase volatility in the near term, but in the long run, they will assist to reduce inflation and restore stability to the crypto market.
What other cryptocurrencies are worth investing in in June 2022?
Tokens with strong foundations have the best chance of surviving a crypto crash like the one we’re seeing now in June.
Terra Luna was a top ten cryptocurrency by market capitalization at the start of May; the token is now worth $0.00005719, down 99.99 percent from a high of nearly $80 in May. After depegging from its $1 price, the algorithmic stablecoin UST is now worth $0.007334.
What cryptos are a decent buy in June 2022? These assets clearly lacked strong foundations.
One of the success stories of the current crypto meltdown has been the stablecoin BUSD. BUSD has climbed into the top ten crypto currencies, and is presently ranked 6th in terms of market capitalization. BUSD is the only stablecoin supported by US banks, has monthly audits, and is the native stablecoin of Binance, the world’s largest cryptocurrency exchange by market size.
