New Year, New Hope!
Investors were optimistic that the cryptocurrency sector would see more gains in 2022.
However, today's crypto market is in shambles, with key cryptocurrencies such as Bitcoin,
Ethereum, Binance Coin, Tether, Solana, Cardano, and XRP plunging by 5% to 6% overnight.
Is there any particular time frame for a bearish or bullish trend to strike the crypto market?
Analysts believe that the stock market usually performs well during the last weeks of December
every year, and this phenomenon is called Santa Claus Rally.
Similarly, there's something called the January effect, which suggests stocks gain during
the beginning of the year due to the heavy selling at the end of December and aggressive
buying in January.
Are there such trends in cryptos?
In today's episode, we find that out.
What impacts crypto prices?
Decoding crypto crash is not easy.
Consider this.
El Salvador became the first country in 2021 to make Bitcoin legal tender, something the
cryptocurrency's creators always envisioned from the start.
It was a watershed moment for the entire crypto space, but no major positive impact on Bitcoin
price was seen after this development.
Similarly, when China cracked down on crypto mining and trading in 2021, it triggered a
sharp decline in prices of almost every crypto asset.
But did China reverse its ban when bulls returned to Bitcoin market after July 2021?
No, any major positive or negative change has only a limited impact on cryptos.
Altcoins defy crypto crash
The crypto investment market is no longer about Bitcoin or Ether.
DeFi platforms enable lending and borrowing without having to sell off crypto holding.
These are the new trends in cryptos that are likely to shape how the overall market performs
in 2022.
The sub-sectors within the market, including non-fungible tokens, decentralized finance
and blockchain gaming are functioning independently.
OpenSea, an NFT trading platform has become a multi-billion-dollar project in a span of
a few months.
Metaverse tokens like Decentraland and The Sandbox are also carving their own niche.
People are buying virtual real estate using these native tokens to earn revenue from digital
assets.
How much downturn have cryptos witnessed?
In 2021, Bitcoin was on a roller-coaster ride, indicating that it is vulnerable.
According to Coindesk, Ethereum, the second-biggest cryptocurrency by market cap, is around 50%
away from eclipsing Bitcoin as the largest cryptocurrency.
Bitcoin is presently over 36% lower than its all-time high of nearly US$70,000 reached
in November.
All other digital currencies are following suit, eliminating billions of dollars from
the combined US$2.1 trillion cryptocurrency market.
Conclusion:
Since Bitcoin's inception, the crypto market has grown exponentially, making many people
millionaires in a short time.
With the recent decline of the crypto market, many investors' fortunes have been compromised.
Investors are now concerned about the crypto market's expected bull run
in 2022.