The Great Crypto Crash Enters Another Week

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Times are tough for cryptocurrency aficionados. After a very strong second half of 2021, we are now seeing what appears to be an endless downtrend as the crypto market crash continues. Whether it’s Bitcoin, Ethereum, or another type of crypto, currencies are collapsing one after another with only brief reprieves occurring on a case-by-case basis. Is this going to be the new normal for the crypto market, or will it rise and recover like it always seems to?

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Cryptocurrencies, as a whole, are known to be volatile. Seasoned crypto veterans have seen both mountainous highs and crushing lows. The crypto market fluctuates just like the regular stock market, but the crashes that occur semi-regularly in the crypto market are the perfect presentation of its true volatility.

The crash is not limited to a single cryptocurrency. Bitcoin may be the star child of crypto, but other currencies have been hit just as hard, if not harder. That’s not to say Bitcoin (BTC) hasn’t suffered a devastating loss, because it certainly has. According to CoinGecko, BTC hit an all-time high in early November 2021, reaching a value of $67,617. The price has been steadily declining since, but it really took a dip in January, falling just above $35,000 on January 23.

As The Economic Times reports, this latest crypto crash erased over $1 trillion in market value. That’s right: $1,000,000,000,000, twelve whole zeros, in US dollars just disappeared in just a few months. Which currencies suffered the biggest losses?

Which currencies are affected by the crypto crash of 2022?

As mentioned above, Bitcoin suffered a massive loss, and we may not have seen the end of it yet. Since its peak in November, BTC has lost more than 45% of its value. While things are looking bad for Bitcoin, other currencies are not doing any better.

Ethereum (ETH), the second most popular coin, is also taking a huge hit. Ethereum’s value (against USD) has fallen hundreds of dollars on an hourly basis in the recent past, only to temporarily regain some ground later – then it drops again. Much like Bitcoin, ETH peaked in November 2021, reaching a value of $4,815 (via CoinGecko.) Although the coin never reached that level again, it has remained in the $4,500 ballpark. until the end of November and halfway through December 2021. – but those days seem long gone now. Just in the past week (Jan 17 to Jan 24, 2022), ETH has gone from $3,356 to $2,381.

We’ve only just reported huge success for Dogecoin, which is now officially recognized as a currency in the Tesla Merchandise Store, but the peak was brief. Dogecoin is now at its lowest value since its unexpected rise in April 2021. In other words: the crypto crash is affecting currencies across the board, be it the massive giants (BTC and ETH) or the smaller parts.

Bull Market vs Bear Market

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Before we dive into what has happened to the cryptocurrency market over the past few weeks and months, it is important to note that this is exactly what the cryptocurrency market is doing. It goes up and down in waves and just looking at the bigger picture over a year shows what market cycle we are currently in. market and the bear market.

A bull market occurs when investments are generally on the rise. There may be a few hiccups along the way, but we’re seeing a general uptrend – it’s a bull market. A bear market is the exact opposite of this and represents a time when stocks fall for an extended period.

Many investment experts agree that we have been in the midst of a bull market for quite some time now. The majority of 2021 consisted of a bull market. Now, with the current crash, some analysts say the bull market is definitely over, at least until the next cycle. As Opeoluwa Dapo-Thomas, a market analyst, told NairaMetrics: “I fear the bull market has come to an abrupt end. Key support levels were breached, $1 trillion wiped out all value from the crypto market.

The pandemic has affected markets around the world

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Whether the bull market is over for good or not, it’s hard to deny that things are tough right now. There could be many reasons for the crypto market crash in 2022. Financial Express cites the uncertainty facing all markets as a direct result of the Omicron variant of the novel coronavirus. Two years into the pandemic, the effect on the market is stronger than ever, acting as another consideration in this latest crypto crash.

The cryptocurrency market is also reacting to the state of the global market, which has also seen a downward trend: again, this is most likely directly related to the ongoing pandemic. Many governments are now taking steps to reduce the inflation of the past two years, and as they rein in the emergency measures previously instituted, the market is suffering.

As USA Today reports, the Federal Reserve started creating dollars from scratch at a much faster rate in 2020 in order to save the economy at the start of the pandemic. Governments around the world have, in many cases, done the same. There was no way it wouldn’t catch up with the market afterwards.

Will the cryptocurrency recover from this crash?

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Many crypto naysayers rejoice as markets hit their lows day after day, but is this downturn here to stay? It’s hard to say for sure, but previous examples of bull and bear cycles suggest that the crypto market will eventually rebound. So far this has always been the case and the payouts have been huge every time.

Just looking at Bitcoin prices on CoinGecko provides a very basic overview of how the cryptocurrency market is going and going. A year ago, in February 2021, Bitcoin was at an even lower price than it is now, hovering around $32,000. We saw it rise to $60,000+ around March and April 2022, only to crash again in May 2022 to $30,000 in June. We know what happened next: the gigantic rise of November 2021.

Whether the cryptocurrency market recovers quickly or takes its time, chances are things will return to normal sooner or later. Time will show if Bitcoin and other coins can hit 2021 numbers again.

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