True, bear crypto markets are stressful to investors. There is confusion, and the sense of fear grows stronger. Is this a great time to buy, sell or hold? Some traders choose to sell while others choose to keep their positions, and there are even some who envisage a good trading opportunity by buying at low prices.
How could you benefit from those investment opportunities? Advanced strategies and market flexibility may be among the most crucial factors that will help you find those opportunities. For that reason, high-quality trading companies, like XPro Markets, are there for you, providing all the resources required to take advantage of your expertise.
Why Is Crypto in a Bear Market?
There is no question that 2022 has been a challenging year for crypto and bitcoin. Bear markets are full of pessimism and fear. The drop in trading volume is the result of extreme fear. Higher inflation and higher interest rates are obvious in such cases. When maintained for long periods, these characteristics can turn markets into winters. A similar phenomenon is occurring today in the crypto markets.
Many argue that the war in Ukraine has raised concerns and led to a tougher monetary policy that directly impacts risky assets like cryptocurrencies. Can cryptocurrencies withstand that pressure and turn things on their head? Fear within the crypto market is exacerbated. Many investors are exiting the market whereas others stubbornly refuse to sell, keeping their position in the hope that cryptocurrencies could stand and come back even stronger. However, what has the history of crypto taught us until now?
The Downturns of the Past
Bitcoin and cryptocurrencies have faced several challenges since they first appeared. Bitcoin's first large bearish market was in 2011 - 2012. That year, a series of hacks and other adverse events occurred that contributed to uncertainty on Bitcoin with Bitcoin's price dropping from $29 to $2.10!
In 2014, Bitcoin's price dropped from $1,135 on December 4, 2013, to $175 on January 14, 2015! How did that happen? Back then, the Silk Road marketplace was shut down and the Mt. Gox exchange collapsed. Silk Road was considered the first Darknet marketplace and was shut down by the FBI in 2013 while Mt. Gox was the largest Bitcoin exchange which processed over 70% of all Bitcoin (BTC) transactions globally.
One of the most widely known "crashes" of Bitcoin was in 2018. The crypto bearish market followed the bursting of the cryptocurrency bubble. After an unprecedented boom in 2017, Bitcoin's price dropped by more than 65%! The cryptocurrency market entered a long winter, recovering in early 2019.
What’s Happening with Crypto Markets Now?
During this trading year, the crypto market experienced a second crash. So far, nearly $400 billion has left cryptocurrencies, and the industry's market cap has dropped below $1 trillion for the first time since January 2021. Bitcoin went below $20,000 for the first time since November 2020, over 70% less than the historic record and all-time high of $68,000 in November 2021!
Bitcoin is now just above $21,000 with many claiming that the crypto winter has come to an end.
Will Bitcoin’s Bear Market End Soon?
It would certainly be very difficult to accurately predict when the bear market will end. However, you can use strategies to predict a potential range in which you could probably take action. It would also be important to properly manage risks, stay active in the market and remain calm during challenging times.
Despite crypto bear markets, cryptocurrencies are still progressing impressively while the blockchain industry is overgrowing and many new projects are being launched each month. Is the world of crypto still an enigma? How many pieces of the puzzle have been assembled thus far? History has shown that digital money can make a powerful comeback. But in what way will it be back this time? Whether you are optimistic or more pessimistic, your current moves can be the ones that will shape your trading career.
Will your strategies shine in the bear market?Log in to your XPro Markets account now, where you will find top Cryptocurrency Futures and more CFD assets such as Forex, Indices, Commodities, and Stocks, and plenty of clear resources at your fingertips to begin planning your trading strategies.
Risk Warning: Contracts for Difference (‘CFDs’) are complex financial products, with speculative character, the trading of which involves significant risks of loss of capital.
Disclaimer: This material is considered a marketing communication and does not contain and should not be construed as containing investing advice or a recommendation, or an offer of or solicitation for any transactions in financial instruments or a guarantee or a prediction of future performance. Past performance is not a guarantee of or prediction of future performance.
