The exodus of forced selling made cryptocurrencies partly resilient in the last month, according to Galaxy Digital Holdings founder Mike Novogratz.
Speaking at a conference in Singapore, Novogratz pointed out:
“We’re in this weird equilibrium where there are a few buyers, there are a few sellers, and there’s not that energy in the market like you’re seeing in the equity market or the bond market where you have to sell, right?”
Significant leverage has engulfed the crypto market, triggering a bearish run.
Nevertheless, Novogratz acknowledged that cryptocurrencies would take off again once the Federal Reserve (Fed) eased the aggressive monetary tightening, but this would not happen in a sustainable way until Web3 projects experienced mass adoption.
He added:
“Many crypto hedge funds won’t survive 2022’s rout in virtual coins. The implosion of Do Kwon’s Terraform Labs project was ‘heartbreaking’ and a lesson for the crypto industry.”
South Korean authorities have asked Interpol to issue a red notice for his arrest after Kwon denied being in hiding from law enforcement.
The crash of TerraUSD (UST) and Luna, which triggered the loss of $60 million of investor funds following the bearish outlook in the market, has made cryptocurrency platforms witness the least amount of engagement in two years based on the departure of weak hands. Market insight provider Santiment explained:
“If it feels like there are less people commenting and showing interest in crypto these days, your intuition is correct. Commentary hasn’t been this scarce since the end of 2020. Twitter has especially taken a hard fall in the past month.”
Meanwhile, Santiment acknowledged that profit-taking tendencies surfaced after Bitcoin closed the $20,000 mark and said:
“Many traders were apparently awaiting the $20k threshold to begin selling their bags. As Bitcoin crossed back above this psychological level, mass profit taking ensued.”
Therefore, time will tell how cryptocurrencies continue shaping up amid a tightened macroeconomic environment.
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