The past few days have been characterized by a wave of bearish trends in the crypto market as prices of major cryptocurrencies have plummeted severely. Still, there appears to be a glimmer of hope, indicating that the crypto drop might not last for long. According to on-chain data from CoinMarketCap, the stablecoin market has held a strong market capitalization over the past 24 hours. At the time of writing, stablecoins held a market valuation of over $315.6 billion, representing only a 0.09% drop. What impact does it have on the broader crypto market? Crypto Assets Get Oversold Whenever the crypto market experiences turbulence, various investors tend to sell their crypto assets out of fear that the value of their holdings will drop significantly. As a result, they may either sell their crypto directly via fiat off-ramp channels or convert it into stablecoins and sell on exchanges. The fact is that cryptocurrencies in the crypto market have been oversold as bearish trends envelope the ecosystem. According to the Crypto Relative Strength Index (RSI), the cryptocurrency market is currently oversold, with the metric at 36.4. For context, the RSI is an indicator that indicates whether the market has been overbought or oversold. It ranges between 0 and 100. Whenever the value leans towards 0, it means that cryptocurrencies have been oversold. On the other hand, a shift towards 100 implies that digital assets are overbought. The overselling of cryptocurrencies explains why the prices of major assets, such as bitcoin and ether, have dropped within days. Investors Flock to Stablecoins The surge in trading volume in the stablecoin market indicates that a significant portion of oversold cryptocurrencies was funneled into stablecoin. At the time of writing, the stablecoin market held a trading volume of over $223.4 billion, representing a 55.57% increase. Since its market capitalization did not drop significantly, it indicates that most of those converting their crypto into stablecoins are not selling. These investors are likely hoping that the crypto market will rebalance. This way, they can re-enter the market as soon as possible and purchase their desired crypto once again. Stablecoins are cryptocurrencies that maintain a 1:1 peg to a particular asset (fiat, commodity, or another crypto). Popular stablecoins include those pegged to the U.S. dollar, the euro, and commodities such as gold. Due to its inherently stable value, investors view holding stablecoins as a safe haven from the crypto market’s ongoing plummeting. Will the Crypto Market Recover Soon? November is off to a rough start for the crypto market, as prices continue to fall. Market watchers project that the apex cryptocurrency, BTC, could drop below the $100,000 threshold. If this scenario unfolds, it could have a substantial impact on the broader crypto market. The crypto market’s performance often swings in response to announcements from the pro-crypto American president, Donald Trump. Announcements from Jerome Powell, the chairman of the Federal Reserve, also play a role in determining the trajectory of the crypto market. As long as there are no negative announcements from these authorities, no sudden sell-offs from whales, and no abrupt shutdown of any crypto exchange or custodian, the market should recover from its current lows within days. The post Hopium? Stablecoin Strength Shows Crypto Drop May Not Last Long appeared first on CoinTab News.The past few days have been characterized by a wave of bearish trends in the crypto market as prices of major cryptocurrencies have plummeted severely. Still, there appears to be a glimmer of hope, indicating that the crypto drop might not last for long. According to on-chain data from CoinMarketCap, the stablecoin market has held a strong market capitalization over the past 24 hours. At the time of writing, stablecoins held a market valuation of over $315.6 billion, representing only a 0.09% drop. What impact does it have on the broader crypto market? Crypto Assets Get Oversold Whenever the crypto market experiences turbulence, various investors tend to sell their crypto assets out of fear that the value of their holdings will drop significantly. As a result, they may either sell their crypto directly via fiat off-ramp channels or convert it into stablecoins and sell on exchanges. The fact is that cryptocurrencies in the crypto market have been oversold as bearish trends envelope the ecosystem. According to the Crypto Relative Strength Index (RSI), the cryptocurrency market is currently oversold, with the metric at 36.4. For context, the RSI is an indicator that indicates whether the market has been overbought or oversold. It ranges between 0 and 100. Whenever the value leans towards 0, it means that cryptocurrencies have been oversold. On the other hand, a shift towards 100 implies that digital assets are overbought. The overselling of cryptocurrencies explains why the prices of major assets, such as bitcoin and ether, have dropped within days. Investors Flock to Stablecoins The surge in trading volume in the stablecoin market indicates that a significant portion of oversold cryptocurrencies was funneled into stablecoin. At the time of writing, the stablecoin market held a trading volume of over $223.4 billion, representing a 55.57% increase. Since its market capitalization did not drop significantly, it indicates that most of those converting their crypto into stablecoins are not selling. These investors are likely hoping that the crypto market will rebalance. This way, they can re-enter the market as soon as possible and purchase their desired crypto once again. Stablecoins are cryptocurrencies that maintain a 1:1 peg to a particular asset (fiat, commodity, or another crypto). Popular stablecoins include those pegged to the U.S. dollar, the euro, and commodities such as gold. Due to its inherently stable value, investors view holding stablecoins as a safe haven from the crypto market’s ongoing plummeting. Will the Crypto Market Recover Soon? November is off to a rough start for the crypto market, as prices continue to fall. Market watchers project that the apex cryptocurrency, BTC, could drop below the $100,000 threshold. If this scenario unfolds, it could have a substantial impact on the broader crypto market. The crypto market’s performance often swings in response to announcements from the pro-crypto American president, Donald Trump. Announcements from Jerome Powell, the chairman of the Federal Reserve, also play a role in determining the trajectory of the crypto market. As long as there are no negative announcements from these authorities, no sudden sell-offs from whales, and no abrupt shutdown of any crypto exchange or custodian, the market should recover from its current lows within days. The post Hopium? Stablecoin Strength Shows Crypto Drop May Not Last Long appeared first on CoinTab News.