With the drastic downward movement in the price of bitcoin, I began to question my self-conscious mind by asking myself, where did the money go? What happened to the bitcoin that was once filled with prospects and high hopes of making me a millionaire before 30. Now the market is in a poor shape, the charts are showing serious downward movements, and the worst of it all, the dip keeps getting deeper. Now, I am left with a wondering thought, will I still become a millionaire before 30 or should I look for another means to achieve my rags to riches story aside from crypto. So, I decided to try a new method in tackling such challenge, write to the people of hive and seek their thoughts as well. Which give birth to this article where I am about to talk about the reasons why the crypto market is in a devastated mood, where the crypto money has vanished to and what to do next? I must say suggestions and opinions are highly welcomed in the comment section since no man is an island of knowledge. In other-words, I am simply going to talk about what makes a bearish market, which also happens to be the current state of the crypto market.
Firstly, what is a bearish market?
According to my favourite finance website for finance related topics, known as investopedia
A bear market is when a market experiences prolonged price declines. It typically describes a condition in which securities prices fall 20% or more from recent highs amid widespread pessimism and negative investor sentiment.
This definition refers to the depreciation in the price of a security (any financial instrument with monetary value) from its previous high price to a new low price which could be 20% less than the initial value or even more. From this definition, one can denote that the crypto market is currently in a bearish state, since the price of bitcoin is way below its actual high price. Bitcoin, which is currently 35,878.31 USD as at the time of this writing, was once 69,044.77 USD on the 10th of November 2021 in accordance with the information from coingecko.com . This shows that ever since BTC hit its peak price three months ago, it has been on the downward slope. Although this has not been that bad since it usually gains stability at certain prices like 50,000 , 51,000 , and even 53,000 which made it easy from alt coins like HIVE, MATIC, BNB and ETH and many others to carry out their own price movement without the interference of the motherly bitcoin. It goes to say that the dominance motherly BTC exhibits over her children (alt coins) is extremely enormous and it gives a justified reason for the bearish state of alt coins at the moment. So if BTC lies flat on the ground, alt coins will also lie flat on the ground and sometimes they may even roll on the ground as well.
With the advance into a new year, even without allowing the month of January to come to an end, we have recently received a new blow from crypto.
BTC HITS 35K!!!!!!!!!!!
This new price has brought a huge shock to me and most of all, a huge to my crypto portfolio. Probably, I can say that in the last 4 months, it has been unheard of that bitcoin will hit 35k and even more shocking is it still went below 35k. Now, just imagine or rather visualize what must have happened to alt coins that forever remain loyal to BTC. Oh! Sorry, just check the market chart and see for yourself. One of my alt coin that has suffered from the collapse of BTC is my dear HIVE. It got to a recent low price of 0.8 USD. This is the same HIVE that got to its all time high of 3.41 USD as of Nov 26 2021. Also, the same HIVE that serves as an amiable reward for blogging and content creation. It is just sad and too bad. But for me, this serves has a bright opportunity since I am still in the spirit of staying positive no matter what. This is because it is the best time for me to even earn more by creating more contents for the hive communities and still get my rewards in HP, HIVE and HBD which I tend to save for the better days that will come immediately after the storm.
SOME CAUSES RESPONSIBLE FOR THE BEARISH MARKET IN CRYPTO
Based on my knowledge from crypto, I believe that there are certain causes that could be responsible for the downtrend we are experiencing. Since it is well know that there is no cause without an effect and now I am more than sure that we all are experiencing the effect of some certain cause.
REDUCTION IN ACTIVITY IN THE CRYPTO HEMISPHERE
With the ban of crypto in various countries like Nigeria, Algeria, Iraq, Morocco, Nepal, Bangladesh, China, Egypt, Qatar, and Tunisia, this has directly led to the reduction in the activity of buying, selling, hodling and even farming crypto coins. Indirectly, it has also affected the investment confidence of crypto investors residing in these banned countries. Thereby reducing their confidence in the power of a decentralized token since their government were still able to ban it in their country. Just take for example, if a total of 50 thousand people from these banned countries had crypto in their possession before the ban, then sold off out of fear immediately after the announcement of the ban by their government. WHAT DO YOU THINK WILL HAPPEN TO THE PRICE OF SUCH COIN THEY WERE HODLING?
It is simple and not rocket science, the price of such coin will drop immediately. This is referred to as A CORRECTION in the stock market.
HUGE SELL OFFS AT CERTAIN PRICE
Another cause that may be responsible for this period of bearish market is huge sell offs at certain prices. Due to the volatility consistent with crypto, traders and even investors have developed trading strategies which involves buying at low price, then selling off when it gets to the target price. This strategy can be explained like this; when a buyer gets BTC at its current of 35,878.31 USD, they could decide to sell off immediately BTC hits 45,000 USD and take the profit made. This is mostly employed by investors with high liquidity to carry out such plan. Then when the desire 45, 000 USD is achieved, a sell off is initiated. This in return creates a resistance for such coin at the 45,000 USD price, which means the price hits, the price of such coin moves towards the other direction, in this case a downside. Sometimes this might not be so, the price may break the resistance if the trading volume is strong enough to push it. This huge sell offs might be responsible for the bearish market we are currently experiencing, but the good side to this story is it will surely bounce back, it is just a matter of time and hodling.
IN CONCLUSION
These are some causes that may be responsible for the downtrend in crypto, but my solution to this new challenge is to work more on HIVE now than ever before. Take advantage of the current dip by releasing more contents on your hive blog because even if the value of the rewards have reduced due to the bearish market, the reward still remains the same and there is even more to gain when the price bounces back and creates more new highs. It is like they say when you want to get something brilliant out of a child, catch the them while they are young, so catch the hive rewards now the price is young and reap the benefit later.
Posted Using LeoFinance Beta
