The crypto market has been seeing a bullish performance for three consecutive days now after several crypto crash sessions. The crypto behemoths, Bitcoin (BTC) and Ethereum (ETH) have been pushing beyond the critical resistance levels currently. Better clarity on the market conditions will be ascertained if BTC closes the daily candle above $23,000 and Ethereum finishes the day above $1,700. These cryptocurrencies rallied over 15% in the last few market sessions. However, the International Monetary Fund (IMF) suggested that further crypto market sell-offs might be triggered soon.
Recent data from material indicators note that the market’s order book is on the sell side if BTC is able to push its price over the current levels. There are also high chances of the largest cryptocurrency hitting a high of $28,000 in a relatively short period of time. On the same lines, Material Indicators stated that:
“If this rally can push past $25k, then $28k comes into focus very quickly. If you are long, don’t forget to take profits along the way.”
In contrast to the aforementioned estimated rally, there are chances of a downturn induced by macroeconomic concerns, which is mainly the recession period. Citing similar issues, the Director of Monetary and Capital Market for the IMF, Tobian Adrian, predicted that the digital currency sector might face immense losses in the future. In a Yahoo! Finance interview, Adrian talked about the dangers that the estimated crypto market sell-offs might induce. He noted that:
“There could be further failures of some of the coin offerings — in particular, some of the algorithmic stablecoins that have been hit most hard, and there are others that could fail. There’s some vulnerability there because they’re not backed one to one. [Some fiat-supported stablecoins] are backed by somewhat risky assets…it is certainly a vulnerability that some of the stablecoins are not fully backed by cash-like assets.”
The IMF official highlighted the crash of the Terra (LUNA) ecosystem. This failure then led to the distraught of crypto lender companies such as Three Arrows Capital and Celsius among others. Adrian then went on to say that other digital assets might also face such a collapse due to crypto market sell-offs.