This morning, the situation in the cryptocurrency industry seems fairly calm. Bitcoin showed an 8 per cent rise in last day’s results, while Etherium, Solana and Avalanche gave out 11, 9 and 10 per cent rises respectively.

Table with the results of cryptocurrency price movements over the day

The current rebound, however, does not mean the end of the pain for crypto investors. For a clear demonstration of this, it’s worth looking at a similar chart – but for a month. Here it is.

A table showing cryptocurrency price movements for the month

With that in mind, it’s not surprising that experts’ opinions on the near-term future of the market are divided. Although most of them are still betting on a further niche crash.

Why Bitcoin collapsed

On cryptocurrency exchange Binance, Bitcoin’s price fell as much as $17,622 at one point over the weekend. Now BTC is back up to the $20,000 line, showing a noticeable rebound. Unfortunately, the growth does not look very promising so far: a full-fledged uptrend in terms of technical analysis is still quite far away.

Hourly chart of Bitcoin exchange rate

According to Cointelegraph’s sources, the reason for the collapse is a combination of several highly negative events, including the collapse of the Terra ecosystem, problems with the decentralized Celsius platform, the impending insolvency of major crypto fund Three Arrows Capital and an increase in the US Federal Reserve’s benchmark lending rate.

In such an environment, many crypto investors prefer not to risk their own money, so they sell coins in the hope of repurchasing them cheaper. The sales put pressure on the exchange rate, causing the value of crypto-assets to plunge predictably.

And that’s not all – things can only get worse over time, as prominent crypto-enthusiasts have also repeatedly stated on Twitter. Here’s one such comment from a legendary member of the cryptocurrency community under the nickname Pentoshi. He now has 576,000 followers.

Luna [Terra], Celsius, 3AC [Three Arrows Capital] = avalanche effect. All this will lead to further bankruptcies of which we are not yet aware. The situation could get even worse before the trend reverses. Until you start hearing about how it all interconnects and forces other funds to wind down, becoming forced sellers of cryptocurrency.

Just since the beginning of this month, Bitcoin’s price has slumped by more than 37 percent – thus already the worst June in the history of the major cryptocurrency. In addition, since reaching its all-time high of $69,000, BTC has already collapsed by at least 70 percent.

Bitcoin returns by month

Read also: Twitter is likely to integrate cryptocurrencies. This has been hinted at by Elon Musk.

There is also relatively positive news – the current situation does not mean a complete depreciation of Bitcoin anyway. There are even historical parallels to be drawn with it already, according to Nexo platform founder Anthony Trenchev. The day before, he said that what was happening was quite clearly reminiscent of the panic in the US stock market in 1907. Here is his rejoinder.

It reminds me of the panic of 1907, when JP Morgan was forced to intervene with its own funds, and then to pool all those who were solvent to correct the situation. This was before the creation of the Federal Reserve, there was no lender of last resort back then.

Nexo head Anthony Trenchev

Just like the major banks at the time, Nexo is now focused on fixing the coin niche. Trenchev noted that Nexo’s management has received proposals from three “home” Wall Street banks, which are “looking to implement their expertise in helping to eliminate the negative effects. In other words, the big players are willing to take the risk and capitalise on the current bearish trend by investing in the crypto industry’s most prominent brands.

Earlier last week, Nexo published an offer to "acquire some assets" of its rival Celsius, which is now approaching full default to its customers. So far, however, neither Nexo representatives nor Celsius management have commented on the situation.

Buying crypto-assets


We believe that the current rebound is unlikely to mean a change of trend in the coin niche, i.e. the transition of the latter to a prolonged growth phase. Still, as many experts on Twitter point out, the situation in the global economy is still unchanged, so there is not much reason for investors to be positive. At the same time, we hope that many of them will remember Bitcoin and other coins and then want to stock up on them at a fairly attractive price. That's exactly what happened in the past after the collapses.