The value of several altcoins and stablecoins has fallen to 90% of their all-time high, indicating that cryptocurrency has officially entered the bear market phase.
Following the recent Luna crypto crash, several leading cryptocurrencies are now down. This is all due to the current bear market sentiment, which also caused a massive NFT market crash.
Recently numerous crypto enthusiasts were worrying because of the sudden crash of the crypto market. And they started to search for an answer for when the crypto market will bounce back to normal. So, here is the brief answer to all your valuable questions. Before we get into the answer for when the crypto market will recover, let us first clarify the reason behind the crash of the crypto market.
"It’s all about doom ‘and’ gloom in the crypto market right now"
Reason For The Crash Of The Crypto Market
The cryptocurrency market is difficult to predict. Every day, the prices of crypto assets rise and fall. There are numerous factors that could lead to a crypto market crash. Let us look at the major factors of crypto market cash.
Fall Of FTX
While there are multiple factors affecting the crypto prices, the most recent one is undoubtedly the FTX-Binance dispute. One of the major cryptocurrency exchanges, FTX, has nearly gone bankrupt. The FTX crash has impacted the entire market, including major currencies such as Bitcoin, which has dropped more than 75% since November.
The End Of The Pandemic-Era (Covid) Effect
The period from March 2020 to the majority of 2021 will almost certainly be remembered. One of the unexpected but this period encouraged people to invest money they couldn't spend on travel, dinner, sporting events, and other experiences that had been effectively canceled for more than a year. Instead of spending money on entertainment, many people invested it in the stock market and a variety of emerging markets, including cryptocurrencies. Now, Crypto assets are losing value, investors are panicking, and all charts have turned red. Covid came and disrupted everything.
Another major reason for the crypto crash. It is one of the crypto assets or currencies known as Luna. Luna collaborates with another coin called UST on the Terra blockchain. When the market price of UST becomes too high, users can convert it back to Luna. This ensures that just enough of both is available to keep prices stable. Nobody expected a complete crypto crash because the system appeared to be flawless. When news of the crypto market crash began to circulate, it was closely associated with reports of both Luna and UST losing value.
Crypto exchange hacks may also contribute to a drop in the crypto market. If a major exchange is hacked and investors lose their funds, it can cause a sell-off as people lose faith in the security of cryptocurrencies and rush to exchange them for stable fiat currencies. After all, exchanges are where people frequently buy and sell and trade their cryptocurrencies, so the security violation can result in significant losses and panic in the crypto market.
To be sure, cryptocurrencies like Bitcoin have the potential to be used as a form of payment anywhere in the world. After all, countries such as El Salvador have recently announced that Bitcoin will be accepted as legal tender. However, cryptocurrencies are primarily used as investment commodities rather than as a means of payment.
This limited utility is one of the primary reasons noted by experts for crypto crashes.
When Will The Crypto Market Bounce Back?
Facts that prove that the crypto market will rise in 2023.
- Sanyal, one of the cryptocurrency market analysts says that Bitcoin could hit 100,000$ by the end of the Year 2023.
- The users of crypto are rapidly increasing, till now 320+ millions of people have started using cryptocurrency worldwide.
- Bitcoin has gained 193,639.36% between 2012 and 2020.
- By 2025, the crypto market will be worth $1087.7+ million.
- The user index for 2021 indicates 97% trust in cryptocurrencies.
- Turkey has the most increased rate of cryptocurrency adoption (20%).
Cryptocurrency and blockchain technology has grown in popularity in recent years, but they have also lost a lot of value as a result of aggressive economic policies implemented by central banks around the world and the dramatic collapse of digital coins such as TerraUSD, LUNA, and Solana. Fear of a recession, combined with rising inflation and other weak macroeconomic indicators, has shaken investor confidence in riskier assets. This has resulted in significant volatility in the overall crypto market, including major assets such as Bitcoin and Ethereum, and the failure of several crypto platforms such as FTX and BlockFi. Some experts believe that crypto markets will recover from their current loss in the near future.
Being patient and playing the long-term game can help you come out strong from the ongoing crypto market. Don't expect to get your money back right away because it takes time for the market price to rise. Numerous traders lose plenty of money during bear markets. Being patient and disciplined aids in the control of your emotions and judgment.
But, Definitely, the crypto market will rise back normally.
The market is undoubtedly going down with major cryptocurrencies like BTC suffering as well. If you are willing to invest in cryptocurrencies or willing to start a crypto exchange then it is the right time to do so before the price hikes. But, how to start a crypto exchange business? Yes, you can purchase a top-notch Binance clone script from any cryptocurrency exchange development company like Bitdeal and customize it according to your needs and then you can launch it instantly, You can also develop it from scratch just by reaching out Bitdeal.
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