Cryptocurrencies took the world by the storm when bitcoin became a widely spoken about asset especially during the latter part of 2017 when it peaked around $19,798. This was then followed by a season of bearish sentiment in the following year. This was when the term "crypto winter" was born.
What Is Crypto Winter?
According to investopedia, Crypto winter typically refers to a prolonged period of bearish market conditions in the cryptocurrency industry.
This period is characterized by a significant decline in prices, decreased trading volumes, and a general lack of investor confidence. During this time frame, many cryptocurrency projects may fail or become dormant, and the industry as a whole may experience a decline in growth and progress.
However, it's worth noting that the cryptocurrency industry has historically been volatile, with periods of rapid growth followed by sharp corrections and extended bear markets.
As you may have realized by now with some cryptocurrencies, they higher they rise, the harder they may fall.
While it's impossible to predict the future of the cryptocurrency industry, it is very important for investors to be aware of the risks involved and to take a long-term approach to investing, focusing on the potential of
adoption of cryptocurrency by mainstream institutions, business enterprises and consumers.
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The Start of Another Bearish Momentum?
Usually, there is a sense of a bear market each time there is a significant bullish movement. But for people who have been in the space for some time, the entire market trend is the key determinant of which side we are heading, which is why most people stick to the 200 moving average as a key indicator.
Currently, a look at the bitcoin chart shows a trading price of about $20,000. This price has retraced a bit from about $19,550 which is just around the 200 MA belt.
A clear short-term bearish momentum is not seen here yet since we seem to be lurking around the key areas of $19,700 and $23,000 from our moving average.
Bearish Momentum Catalysts
A bearish momentum is usually catalyzed by a big news in the industry. This is usually seen in times of Fear, Uncertainty and Doubts commonly known as FUD. Such catalysts are good for some minor corrections or may lead to tremendous fall in prices.
A typical example of a catalyst is what happened to FTX in November last year. This occurred when bitcoin was kissing the tipping point of the moving average. And within the span of a two-day period, the price tipped from $20,700 to $15,588.
Similarly, the current fall in prices may be linked to the bankruptcy of Silvergate. But they were already hinting on filing for bankruptcy during which the prices were declining. If anything at all, the effect of this news event wasn't as severe as FTX's.
I don't say this to push a bullish narrative. However, I think we may be nearing the lows of this bearish market due to the current signs and present conditions and might be a good opportunity to ape into some good projects.
Thank you for your attention.
Posted Using LeoFinance Beta
