CRYPTO MARKET COULD REMAIN BEARISH IF THESE THINGS DON’T CHANGE

 

Bitcoins (BTC)lost theirvalue by more than half since their all-time highs in November 2021, leading to a major slump in the entire cryptocurrency market. Meanwhile, as soon as investors had started to recover from Bitcoin’s fall, Terra and TerraUSD massively hurt the rest of the market by falling further below. The fall of the Terra ecosystem spread a wave of fear and chaos leading to a massive self-off season. This weak sentiment resulted in investors withdrawing their money and dumping their investments.

According to market experts, Bitcoin and Ethereum, the two of the most valuable digital assets in the market have lost their value by more than 40% since mid-November of 2021. In recent times, the price of Bitcoin has fluctuated more than any investor could have ever imagined. As the digital currency’s price is set around the$29,000 mark, investors feel relieved thinking that the crypto has finally stabilized, but experts predict that Bitcoin is due for more fluctuations. Recently, reports have revealed that the total crypto market cap is down by almost 43% within just two months. But the market will soon regain its glory if certain metrics are set straight.

The digital currency market cap has been ranging from $1.19 trillion to $1.36 trillion for a period of 20 to 23 days. At this point, Bitcoin witnessed a gain of 3.5%, whereas, Ethereum experienced a gain of about 1.6%, which somewhat relieved the investors. But the cryptos fell back again! Besides this, the fears of regulation continue to weigh over investors’ crypto-buying preferences. BTC’s decline since November’s high has approximately blotted out about $600 billion in market value and over $1 trillion from the broader crypto market. Turmoil in stablecoins has introduced the added misery of greater liquidity in cryptocurrencies.

 

 

The Important Metrics to Consider in this Bear Market

The Fear and Greed Index is a data-driven sentiment gauge that clearly depicts the bearish sentiment of the crypto market. The indicator has consistently maintained its position below 20 since May 8, as the crypto market touched its lowest levels when it lost $1.7 trillion.

No investor would like to face a bearish market as it destroys portfolio value and causes fear and panic amongst investors. But one of the most advantageous aspects of a bearish crypto market is that it provides investors with the time to reconsider their investments and research more on other profitable projects that might thrive when the prices surge again. For example,Cardano continues to gain 19% as the Vasil hard fork is waiting for its launch quite soon. The upgrade aims to improve scalability and ADA’s smart contract functionality by galvanizing deposits over the decentralized network.

Major altcoins like Solana fell more than experts could have ever been anticipated. SOL has been constantly facing network issues for a period of seven months.

Besides these issues, the situation around Tether has also been quite challenging for the crypto market and its investors. The re-launch of the LUNA 2.0 protocol has not been helping because LUNA users as still speculative and sceptical about its future. Most of the long-term crypto buyers have left the crypto market or are also choosing other centralized, traditional assets to avoid further financial accidents.

Bottom Line

Several price metrics need to change for the crypto market to rise again. Experts believe that the research they conveyed posed evidence of more downsides. This is mainly because of the slightly higher conditions of altcoins on the bearish levels and also due to the evident lack or loss of interest in investing in cryptocurrencies from the Asian retail markets. It is evident that crypto bulls have to show much more capability to attract more investors in the market.