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The crypto markets have crashed hard, there’s much panic among the investors, and many people are seeing their first bear market.
BTC price is down to $20,100 at the time of writing from an ATH (All-time high) of $69,000 in November 2021. As a whole, the crypto market has lost $2.1 trillion in market capitalization.
A lot of FUD (Fear, Uncertainty, and Doubt) prevails among the investors, but is it something to panic about? Let’s find out.
Let’s look at the history of Bitcoin since 2008. In this case, we have been continuously following a trend where the bull markets last for 2 years, and then a 2-year bear market follows.
The Crypto market saw the first bull run cycle from 2012- 2014, then a bear cycle from 2014-2016, followed by a bull run from 2016-2018, again a bear run from 2018-2020. The recent bull run started in 2020 when the global markets fell due to the Covid-19 pandemic. As per history, in 2022, a bear market was bound to happen, so it is nothing to worry about.
Apart from the crypto markets, if you look at all the major global indices like S&P 500, Nasdaq, DowJones, etc., are also in a bearish trend.
The crashes are happening because of the macro-economic situations; the inflation is at an all-time high, interest rates are rising, and war, etc., are causing these crashes.
Now you know the reasons for this crash in the markets, but you must have this question:
When could we hit a potential reversal?
There is no straight answer to this question as no one can predict the exact bottom. Still, we can get an idea from history because even if history doesn’t repeat itself, it forms a pattern.
If we look at the market, they have been falling for the last 6 months, and as per history, markets can not keep falling for an infinite period; there has to be a bounce.
Based on the technical analysis, BTC has historically taken support at the 200 Moving Average, which is also happening this time. The markets have taken support at the 200MA, which historically has been the starting point of bull markets.
There’s also the concept of Bitcoin Halving to consider.
Bitcoin halving puts a cap on the supply of new coins by halving the mining rewards. Due to this, if there is a considerable demand, the price will rise. Bitcoin halving has led to a bull run since its inception.
The first Bitcoin halving happened on November 28, 2012, followed by the second on July 9, 2016, and the most recent on May 11, 2020. The next one will happen in early 2024.
And as we had already discussed, the price of BTC tends to rise after halving because the supply is cut by half, and the strong demand pushes up the price.
Experts and big institutions also expect a bull run in 2024 after bitcoin halving. In the short run, we can expect a possible reversal soon as the macro-economic situation improves.
Should you panic sell and leave the markets?
Many of you might be facing the bear markets for the first time, and it is hard to see your portfolio going down daily.
But it would be best if you remembered that this is the time when the opportunity lies.
You are getting every strong coin at a discounted rate. Even if you see historically, bear markets are not new; people always spread rumors like crypto is dead, but that is not real.
You should keep investing and try a long-term strategy as it will give you the maximum benefit.
Also, this might be the last bear market of crypto that is unregulated because countries across the globe are planning to make regulations and taxation on cryptos.
Bear markets are a golden chance to accumulate cryptocurrencies and give yourself a better future.
If you are confused about what to do, you can read our article, where we discussed how to grow your portfolio in bear markets.
Bonus tip: You can use staking and farming to hedge your risks in this bear market. Roseon app has launched staking and farming facilities where you could stake your cryptos and get rewarded.
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