Crypto Market Crash
With rising inflation, a shaky stock market, and rising interest rates, many investors are feeling pessimistic about the economy, resulting in the crypto market crash in June.
Cryptocurrencies have been experiencing a rough ride of late, as most of the top cryptocurrencies have lost up to 40% of their market value. Among them are cryptocurrencies like Ethereum, Bitcoin, Terra, and a few others.
Bitcoin has gone from almost $69,000 to $21,000 in the span of seven months!
Investors are nonetheless concerned about the long-term health of the cryptocurrency industry in addition to macroeconomic issues because some significant crypto players have recently stopped withdrawals, slashed staff, and attempted to stop losses. The retreat in the crypto ecosystem is not the biggest threat to the price of cryptocurrencies; rather, it is elements that contribute to the challenging economic scenario.
What caused it?
In June, the value of cryptocurrencies reached a new low of 2022. The value of all crypto assets fell to $977 billion, just under the $1 trillion level. After touching $3 trillion in market capitalization in November 2021, the value of all cryptocurrencies has gone down by more than $2 trillion. Nearly all popular coins are now worth half as much as they did at their peak.
The sharp sell-off by investors amidst rising inflation concerns and the suspension of withdrawals by cryptocurrency loan firm Celsius seem to have been the primary causes of the crypto meltdown. Investors’ continued avoidance of risky assets has also affected the stock markets.
According to experts, the sharp decline in the price of cryptocurrencies is a sign that investors’ appetite for risk is declining. They are obviously leery about risky investments. Cryptocurrency has become one of the most unpredictable financial tools due to all of its unknowns and volatility.
Lessons to learn from the Crash
• Although it is hard to “predict” the market, astute investors are aware that there are bull and bear movements in every market and that you should occasionally “enter” and “leave” the cryptocurrency market.
- It is often said that it is not a Good Strategy to Buy the Dip. This is because it implies that you ought to buy further Bitcoin whenever the price drops! It indicates that you think the price of bitcoin will always rise. So you buy more whenever prices are lower.
- Avoid following influencers irrationally. Always conduct your own investigation and keep in mind that even the most successful projects might fail in a bear market.
- Most cryptocurrencies rise in a bull market, even poor projects. Therefore, you might assume social media influencers are quite shrewd if they suggest you buy some cryptocurrency and the price truly increases. They are not, though.
• The cryptocurrency market is quite complex. There are no “professionals” who is always correct.
• Use the ROHAS technique to analyze cryptocurrency projects, looking at the project’s revenue, organization, history, algorithm, and social community.
Currencies that are most likely to survive such crashes
Few cryptocurrencies are hanging on by a thread in this severe bear market and may not make it out alive. But for the present, there are some encouraging signals for the bitcoin sector. A handful of the cryptocurrency listed below may survive a major market crash:
- Polygon Matic
- Shiba Inu
Few tips investors should keep in mind:
- Constantly make wise choices. A good investor can be distinguished from a bad one by their decisions. Like with any asset class, traders should make decisions based on thorough analysis and avoid being swayed by social media or peer pressure.
- It’s important to fully comprehend the risks. The price of cryptocurrencies is famously unpredictable, with daily price changes of up to 15%. The basics of investment must be strengthened in order to prevent losses during a market crisis.
- Create a portfolio that is diverse. It is wise to invest in several tokens that are developing related technologies rather than just one, as most ventures are still in the early stages
- According to experts, the technology behind cryptocurrencies is still in its infancy, and it may take 5 to 10 years for projects to fully realise their potential.
Many lessons were learned from the crypto meltdown. This week will be remembered as a turning point in the history of the cryptocurrency sector and a reminder to fans that more work still needs to be done.