This week, the cryptocurrency market lost more than $ 1 trillion in an instant, with the market rebounding to a stable nearly $ 2 trillion at the time of writing.
But after such a severe sell-off, the market is shaking and now there is speculation as to whether the drop was enough to end the bull market. Others claim that this was a necessary cleanup and nothing more than a correction and that the cryptocurrency is on its way to hundreds of thousands for every coin this year.
This is what is really going on behind the cryptocurrency market crash and the scenarios that could be expected.
Crypto Inside Claims China Is Responsible For Massive Market Downturn
Cryptocurrencies like Bitcoin, Ethereum, Litecoin, and others are highly speculative assets. The community that supports these assets loves anonymity and conspiracy. More than anything, they like to speculate on future price action. Will Bitcoin fall further? Or will the cryptocurrency rise to the lofty Bitcoin price predictions that analysts expect?
Those questions can only be answered in time, and yet the outcome is not clear down the road. What just happened in the cryptocurrency market is a perfect example of the unpredictability and volatility that Bitcoin and Ethereum are notorious for.
Newcomers have gotten used to easy gains and a seemingly endless uptrend, making the environment even more conducive to a massive whale shake. Instead, speculators point to a coordinated effort by China to damage Bitcoin. This matches an alleged internal 4Chan post.
An anonymous user suggested that Bitcoin would crash to 30,000 and even said where to set limit orders to make sure they are filled. Sure enough, Bitcoin reached that goal and rallied to more than $ 40,000. But now they say 25,000 will arrive in the future, so there could be more drops on the way.
Technical analysis suggests that a correction should have come earlier
The most likely scenario is that, considering how high the cryptocurrency rose in just one year, from 4,000 to more than $ 64,000 per coin, a correction was needed for a while. No asset is moving up in a straight line, not even cryptocurrencies, and Bitcoin and Ethereum came close to it.
While the uptrend had turned parabolic, the parabola broke, suggesting a major collapse, something that has already been seen. Now the focus is on whether the bull market has ended and a bear market will begin, or if this was just a shake-up before new highs.
At this point, the damage has been done mostly to market sentiment, so the trend now is how far the whales and institutions will want to take it. Retail is affected and could avoid the crypto market for some time, so the money will have to come from another source. Bitcoin and other altcoins could become more attractive to even more institutions and corporations at lower prices, keeping the uptrend alive.
Bull market or bear market: how to prepare
But since it is not really known if the bull market is active or if there is a bearish phase on the way, anyone looking to avoid jolts and make the most of recent market volatility should consider the versatility of the award-winning PrimeXBT trading platform.
By taking advantage of long or short positions, traders can hedge any spot position or long position for Bitcoin placed for each bounce if the trend turns completely bearish. Rather than seeing your capital crushed in a crypto market shakeup, stop-loss orders can prevent losses and ensure that profits are secured if there is sudden volatility.
For those who don’t even know where to start, there is also the Covesting copy trading module, which connects followers with strategy managers. During the recent slump, the top strategy managers on the Covesting leaderboards continue to post gains of more than 500%, while the rest of the market continues to tremble in fear from the sudden and severe downturn.