Feared by many investors, others see real opportunities in this delicate period of cryptocurrency cycles. The bear market, or bear market, is very difficult to define. Generally, it is only after its beginning that we realize that we are immersed in it, and it is only after several bullish weeks that we realize that this stage has just been completed. .
However, for each bear market, there are several stages that you have to get to know, identify, and tame.
- Three steps to a bear market?
- A first stage of the bear market inseparable from the bull run
- A bear market is, after all, synonymous with selling
- Total boredom and an endless down cycle?
After falling from a high of $69,000 in November 2021 for Bitcoin to a low of $17,500 in mid-June, there is no longer any doubt that we are indeed in a bear market.
However, the current debates concern the progress of this bear market, and in particular whether this trough in mid-June is the long-awaited bottom or whether new troughs are to be expected soon. While Bitcoin has been stabilizing around $24,000 for the past few days, the asset suddenly dropped this Friday, August 19 and is trading very close to $21,000 at the time of writing. Thus, it might still be a bit early to fully rule out a drop below $17,500.
Three steps to a bear market?
While analysts and figures in the crypto sphere repeatedly speak out regarding Bitcoin’s cycle, the debate is still very heated between those who believe that the worst is behind us and those who believe that new lows will be reached. .
However, dissect a bear market can be complex, since it is necessary to take into account the variation of investors’ emotions as well as that of prices, and events external to the crypto market.
According to Jason Yanowitz, the founder of Blockworks, the bear market is composed of only 3 phases. The transition to the second phase would have taken place around mid-June, when the Luna episode led to a carnage within several lending platforms. For the third phase, the conjectures are numerous, but all of them without any real certainty.
A first stage of the bear market inseparable from the bull run
Very difficult to discern, the first phase of the bear market corresponds to a market correction. This is a first correction after reaching highs, and suggests a temporary price consolidation before finally reaching new highs.
Indeed, a little incomprehension reigns, but given that the falls are not considerable, the situation of the markets remains apparently positive. Moreover, companies are still in good economic health. The first phase does not give the impression of having entered a bear market. The only sellers seem to be the weaker (or ultimately, perhaps the smartest?) hands while the majority of investors are holding on to their chips with determination.
A bear market is, after all, synonymous with selling
During the second stage, the masks fall. While the sale was optional in the first stage, the sale is often unavoidable at the second. Indeed, investors are looking to get rid of their tokens, tokens generally in losses and sometimes bought at the time of the ATH which has just been reached. In this situation, it is very difficult to keep the head above water, the nerves are strong, but they do not last indefinitely.
Some projects “crash” from moment to moment; this year, the hecatomb began with the Terra LUNA cataclysm and the LUNA (now LUNC) and UST tokens. After this event that marked the crypto spring, many companies, often too exposed to the Do Kwon token, suspended their withdrawals overnight, causing considerable losses for investors.
Indeed, the liquidity of Celsius, Voyager Digital or even 3AC is currently out of reach for investors.
The second stage of the bear market is that of confirmation and regret, and one question keeps coming up: why didn’t you sell at the top or after the first drop ?
Financial independence is now a sweet distant dream while the reality is more cruel: the dream of the Lamborghini is coming to an end for many investors. Our friends and relatives ask us how our cryptocurrencies are doing and we can only answer, with embarrassment, that the losses are only theoretical because our tokens are still in our hands. Concerning the drop in prices and the collapse of the market, if you listen carefully, you hear everywhere “I told you so”.
This phase is crucial and indicative of a deeper evil within the crypto sphere, with “do you want some” layoffs at many crypto exchanges.
Finally, even if crypto influencers or youtubers constantly repeat that it is necessary to “hold” at all costs and “buy the dip“, we notice that few people pursue this strategy. Liquidations follow one another with investors selling at a loss and prices constantly falling. Not many people seem “buy the diplet alone crypto influencers. MicroStrategy and El Salvador are still buying, but the amounts disbursed are much cheaper than at the start or the first bitcoin dips.
Total boredom and an endless down cycle?
After cascading liquidations or certain recurring flash crashes, the fall is now slow, gradual, but certain. Without really realizing it over a short period, portfolios drop week after week.
The period is gloomy, investors are bored, the lack of interest in cryptocurrencies is growing. False hopes are on the rise, with false bullish breakouts for Bitcoin following one after another. Abandonments within the crypto sphere are increasing, from developers to CEOs of certain small projects, from institutions to individuals, who could well remain in an environment decried by the media and other personalities who wish the annihilation of cryptocurrencies.
Although the boredom persists, the DCA (Dollar Cost Average) seems to be one of the most suitable solutions for the last believers, to wait and prepare for the next bullish cycle.
Indeed, although everything seems to be over, if Michael Saylor wears a big smile and mentions Bitcoin day and night on his social networks, if El Salvador is experiencing this bear market rather well and the (theoretical) losses linked to recurring purchases of BTC, c It’s good that a next bull cycle is approaching. It shouldn’t be expected to happen overnight, after every daily or weekly close in Bitcoin’s green, but it will and will happen eventually.
The market has endured steadily since 2009, despite Bitcoin being announced as dead in the media countless times. Especially since this kind of cataclysm does not only affect the cryptocurrency market; the equity market has also had its dark periods.
In a Bear market, it is crucial to remember that cryptocurrencies and the blockchain are not only speculation and “easy money” as many think, but also the contribution to projects which wish to make the financial world better, with more ample opportunities, technological advances and above all more decentralization and anonymity.
Patience is the key, and will remain so.
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Bear market: the different stages of a bear market – BeinCrypto
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