A bear market is horrifying for investors but it looks like the bears have taken control of the crypto market. By January end 2022, giants like Bitcoin & Ethereum lost up to half their value while others plunged even more. The recent sell-off in the crypto market wiped about 1.7 trillion $ in market cap from the industry, which are worry signs for any investor.
Experts around the world have mixed views, with some favoring this fall as buy opportunity while some are forecasting even a deeper plunge by the end of mid-year. Here is what some experts have to say about this fall:
“The daily timeframe continues to traverse within the descending channel pattern. The next support for Bitcoin is expected at the $30,140 level. With the factors surrounding the BTC’s current position, we could see a trend reversal from this level," said Siddharth Menon, COO of WazirX.
Unfortunately, crypto is still quite correlated with the stock market, and anything that happens there will eventually affect the crypto market, said Edul Patel, CEO, and Co-founder of Mudrex.
With several institutions raking in billions of dollars, it is a good buying opportunity," said Patel of Mudrex.
David Marcus, the former head of crypto at Facebook-parent Meta, appeared to admit a crypto winter has already arrived. In a tweet Monday, he said: “It’s during crypto winters that the best entrepreneurs build the better companies. This is the time again to focus on solving real problems vs. pumping tokens.”
Vijay Ayyar, vice president of corporate development and international at crypto exchange Luno, thinks the recent slump in crypto is more of a “correction” than a sustained downturn.
The crypto community is divided in this, while some are comparing this to the 2018 crypto winter that lasted for almost 1 year, while some say that it is an opportunity to buy during this sell-off and the worst is over for cryptocurrencies, how this turns out, remains to be seen.
Why is crypto crashing?
Bitcoin and other cryptocurrencies have become interwoven with the stock market, with bitcoin alone near its highest correlation with the stock market since September 2020,
That means when the stock market goes down so does bitcoin, & the stock market has taken a heavy beating from the start of this year.
There are a lot of geopolitical issues that have a part to play in this crash, US FED rate high news has worried the investors which reflected on the global markets and also on the crypto market, the situation evolving in Russia with conflict with Ukraine has also caught up with the global market.
Some other global markets reaction to cryptocurrency, China's central bank had announced in September 2021 that all transactions of crypto-currencies are illegal and outrightly banned, hence effectively banning digital tokens such as Bitcoin. Even Russian President Vladimir Putin has repeatedly linked cryptocurrency with criminal activity. India, which is currently one of the biggest markets for cryptocurrency is proposing a bill to regulate the crypto market, which creates a cloudy situation for the investors. In April 2021, the Central Bank of the Republic of Turkey had issued a regulation banning the use of cryptocurrencies.
What the future holds for cryptocurrency remains yet to be seen but for sure, it has been a rocky start to 2022.