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Crypto Crash: Is Now A Good Time To Jump On Board?

The crypto market looks to be crashing — or at least going through a severe correction — as Bitcoin (BTC) dipped below $33,000 for the first time in almost a year, with Ethereum (ETH) and Cardano (ADA) also falling.

Given the ancient financial cliché of “buy the dip,” investors may be hunting for a piece of the unpredictable crypto market to avoid a long-term bear market.

If you’re considering investing in cryptocurrencies, here’s a look at prior patterns, expert advice, and buying ideas for beginners.

Significant Setbacks

BTC’s price has dropped more than 20% in the last month, to roughly $30,754 today. It sold for as much as $69,000 in November 2021. A decline of greater than 50% indicates severe losses.

Over the last month, ETH has lost around a third of its value, falling to roughly $2,000, while Cardano (ADA) has lost nearly a third of its value, falling to $0.57.

While this isn’t quite as bad as the 2018 crisis, when Bitcoin lost 80% of its value, experts warn that things might become worse for anyone still holding BTC.

Is it a Good Idea to ‘Buy the Dip’?

The “buy the dip” idea is predicated on the notion that price dips are only transient fluctuations that will right themselves over time. Dip purchasers expect to profit from price drops by purchasing at a bargain and reaping the benefits when prices rise again.

Buying cryptocurrencies at any price — less alone a downturn that might turn into a long-term trend — is dangerous since crypto markets are unpredictable. Prices may rise to earlier levels, but they may fall much more, putting your investment at risk.

If history is any guide, the current dip (or crash, depending on your point of view) might rebound as it did last year, when prices plummeted to comparable lows before rising to pre-dip levels.

Bitcoin prices, for instance, have demonstrated some seasonality so far, falling in value to varying degrees in the spring before rebounding in the early summer. However, as with any investment, previous success is no guarantee of future outcomes, especially in the volatile world of cryptocurrency.

Do your research

According to estimates from the price-tracking website CoinMarketCap, a significant sell-off in cryptocurrencies took out over $200 billion in worth in only 24 hours.

The collapse of the TerraUSD stable coin triggered a widespread drop in the crypto complex, which impacted big tokens hard.

Ethereum, the second-largest cryptocurrency, fell about 15% to $1,700 today, its lowest level since June of last year.

Unlike earlier sell-offs in broad financial markets, when cryptocurrencies mainly were unaffected, the selling pressure on these assets has weakened the larger argument that they are reliable repositories of value in times of market instability.

Tera and Luna Crash

After Terra’s price dropped, the Terra blockchain was suspended for nearly nine hours. No new blocks were produced on the blockchain network during the pause.

Terra token holders couldn’t move their assets until the blockchain was unfrozen. After substantial $LUNA inflation and a considerably decreased cost of attack, Terra validators have opted to pause the Terra chain to avoid governance assaults.

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Nitesh Padghan

Nitesh Padghan

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I work with brands that operate with a healthy dose of impatience to scale fast, connect with the culture, and steal back attention from their competitors.