Numerous crypto investors may be struggling to survive as we sail through an extended period bear market. A balanced crypto cycle includes both bull and bear markets. The more thoroughly you research and evaluate the bear market, the better off you are.
Although it is simple to express in theory, the required activities need experience and continuous evaluation. The cryptocurrency market is extremely volatile and carries inherent risks. Furthermore, we have seen some diligent cryptocurrency traders and investors who successfully traded the bear market wave.
The price drop can be exploited to the benefit of investors as the cryptocurrency market experiences ups and downs.
The cryptocurrency bear market
A bear market is often when crypto asset values fall into a prolonged recession state. A bear market is generally a prolonged period of falling prices. Unlike temporary declines, a bear market usually lasts longer. Investors are discouraged by recent cryptocurrency market lows, triggered by rising inflation and recession concerns.
But surviving the bear market is hard work. It is mainly due to the lack of study and the diligence of the investors who are riding the difficult wave. The bear market is usually triggered when there is an imbalance in supply and demand. An overthrow of demand occurs due to increased selling pressure triggered by uncertainty and fear.
Past bear markets
One of the biggest drops came in December 2018, when Bitcoin it fell from $20,000 to around $3,000. The Great Crypto Crash of 2018 was a phenomenon, and the intensely depressing condition persisted into 2019. The global crypto market capitalization fell from $820 billion to just over $100 billion.
The cryptocurrency bear market also emerged in 2022. The main triggers for the crash were the fall of the Terra ecosystem and also the fall of several cryptocurrency companies that followed suit. The cryptocurrency crash of 2022 was also due to the growing correlation between financial markets and micro-risks such as energy prices and inflation.
How Institutions Make the Most of a Bear Market
When it comes to trading in bear markets, institutions are one of the most technologically advanced companies. Institutions frequently sell in moments of overconfidence and buy in moments of underlying fear.
In July, $474 million from institutional investors poured into digital asset traded funds, continuing a recent trend that institutions have followed for quite some time. Institutions take full advantage of market stress and pool funds.
The link between cryptocurrencies and traditional markets will increase as institutional interest in digital assets increases. There may even be a day in the future when digital assets outperform traditional markets as the possibilities in DeFi, the metaverse, and crypto markets combine into a mature and well-defined industry.