Are These Signs That Crypto Is Recovering After Bloodbath
[TL; DR]
A Crypto bloodbath signifies a bad phase or period whereby the major crypto tokens are experiencing a rapid fall in price, and it is a prolonged and sudden bearish phase.
Experts opine that the crypto market has spiraled into a bloodbath since the first week of February 2022.
The major causes of the crypto bloodbath include the proposal of the Russian government to ban the use of cryptocurrencies.
The United States Federal Reserve is tightening monetary policies by increasing interest rates, which has led to a bloodbath.
The market is expected to eventually recover from a market that fell from $3 trillion to about $1.3 trillion during the crypto bloodbath.
What makes it seem like the recovery is near is that many investors are buying the "dip," hoping that they will have massive gain when it starts rising.
Experts assert that the bloodbath phase is temporary but might take longer for the crypto market to recover.
Keywords: crypto, bloodbath, phase, recovering, market, investors.
[Full Article]
Recently, the crypto market has been in its “bearish phase.” All major crypto tokens were severely hit and are currently at their worst state or recovering piecemeal.
Experts speculated on the current declining phase in the crypto market but did not envisage that it would be as enormous as this. Experts consider the drastic and continued drop in the price value of the major digital assets as a bloodbath.
It is, therefore, important at this juncture to identify the various signs and causes of a bloodbath. After that, examine the crypto market and justify whether the signs show that the crypto is recovering from the bloodbath or not.
What Is Bloodbath In Crypto?
Image: iNews
A bloodbath in crypto is used to describe a bad phase or period in the crypto market. Bloodbath is used to identify events whereby the major crypto tokens are witnessing a rapid fall in price.
Bloodbath is similar to the bear market or bearish phase. However, when a bloodbath occurs in crypto, the crypto tokens' price value drops suddenly, and the drop cuts across a larger percentage of the market.
Since the first week of February, experts have identified that the crypto market has been experiencing a bloodbath. Bitcoin, the largest cryptocurrency, fell from about $35,000 to around $21 000.
As of June of the same year, the price has declined to $19,000. According to Coinmarketcap.com, other tokens such as Ethereum have plunged by over 31%, Binance Coin dropped by about 228.04%, Dogecoin fell by about 24%, and Shiba Inu declined by 33%.
These declines across major crypto tokens were of a similar pattern, and it was sudden and has continued to fall over a long period. What could then be the cause of the Crypto bloodbath?
Major Causes Of Crypto Bloodbath
Research shows that the following events were the direct causes of the sudden decline and drop in the price value of Crypto tokens. They include;
In an unprecedented manner, The Central Bank of Russia submitted a proposal to the Russian government. The proposal was for the government to ban all use and mining of cryptocurrencies in Russian territory.
According to Sharat Chandra, a Vice President at EarthID, she said “ Global tech stock sell-offs coupled with the news of the Russian central bank banning cryptocurrencies……. Have added mayhem and bloodbath on crypto markets.”
Similarly, The European Securities and Markets Authority has recommended a ban on Proof of Work mining. The Authority suggested that regulators switch to the Proof of Stake mining as the Proof of Work protocol will eventually lead to the downfall of the crypto market.
Finally, the US Federal Reserve is putting measures to tighten its monetary policy controls. The controls that include increasing the interest rate, among others, will exert pressure on risky financial instruments such as crypto tokens.
Vikram Subburaj, the Chief Executive Officer of Giottus Crypto Exchange, said, “ Investors across financial markets are de-risking their investments to the United States dollar and bank deposits driven by fears of interest rate hikes; by the US Federal Reserve this year….”
These major events and regulations by Giant nations and policymakers largely contribute to the Crypto bloodbath.
Will Crypto Recover From This Bloodbath?
There are expectations that the crypto will recover from the bloodbath. To be realistic, the bloodbath will come and go; however, many investors and crypto holders would have suffered significant losses.
The market is decentralized and volatile, coupled with a massive sell-off by investors. Albeit, no matter how deep the crypto market goes, it will recover and most likely surpass the all-time high value of $3 trillion.
For instance, the Omicron variant of the coronavirus is still ravaging at a time the world economy is just recovering from the damages caused by the first wave of coronavirus. Experts opine that world leaders and policymakers are now better equipped to manage the crisis so as not to affect the economy as the first wave of Covid-19 disrupted the global economic activities.
Conclusion
It is realistic to think that the crypto market is recovering because, after the drastic fall, some enthusiasts are pulling back their resources to “buy the dip.” For a smart investor, a market that dropped from an all-time high of 64,000 dollars to 20,000 dollars is worth investing in at this phase.
Caroline Bowler, the CEO of BTC Markets, said, “I think people are coming in and saying, ‘we think this is now a perfect point to come into the market.”
Sooner or later, the price value will rise and probably surpass an all-time high, and the investors will make massive profits.
The market is risky, and while you expect the price value to recover, it might keep dropping. Someday, the light will shine at the end of the tunnel, and the bloodbath will become history.
Author: Valentine. A, Gate.io Researcher
This article represents only the researcher's views and does not constitute investment suggestions.
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