For seasoned investors – a crypto bear market is nothing new.
Each crypto investor will have their own opinion on what precisely a crypto bear market is. For coinlabzz.com, a crypto bear market is defined as a prolonged period (around 3 months) where market confidence is low & prices are falling. Ouch! That hurts!
Now if the markets get super bad for a long time, we call it (drum roll please) Crypto Winter. Word combo you don’t want to hear. During Crypto Winter it’s so bad that you might think the bear market will never end. you even might see a White Walker outside your window. Last Crypto Winter lasted from January 2018 to September 2020.
Put this into perspective Bitcoin is 13 years old, and the cryptocurrency market has had many severe crashes. Depending on when you have started your crypto journey you may have survived one of these. Look over here!
Some historical events below:
- Bear market No.1 Bitcoin unit price dropped from 39 USD to 0.01 USD in 2011. Well, this I do call a real crash!
- · Bear market No. 2: Bitcoin tanks from $1,000 to below $200 in 2015. It’s just a dip.
- · Bear market No. 3: Bitcoin plunges below $3,200 after hitting $20,000 in December 2017. It’s just another dip.
- · Bear market No. 4: Bitcoin plummets from $68,000 to below $20,000 in 2022. Yes, damn right! Cryptocurrencies have suffered a brutal comedown this year, losing $2 trillion in value since the height of a massive rally in 2021. Holy mackerel! I still can’t believe it! Experts told us it will be a super-cycle.
According to Grayscale Investment’s estimate the current bear market will last to approximately March 2023.
Although unpleasant, bear markets are part of the market cycle, are not crypto-specific phenomena, and pose great opportunities for investors like you and me! Whoop whoop! Coinabzz.com are therefore doing a strategy of dollar cost averaging and slowly filling their crypto bags with Crypto at discounted rate. For investment periods of 10 years, the simple strategy of Dollar-Cost Averaging outperforms anyone who tries to time the market at least in S&P 500!
Bitcoin market cycles lack a standard definition but typically last approximately four years, with bull runs being two to three times longer than bear runs. Let’s simplify: 3 steps forward, 1 giant leap backwards.
Having said that there is no agreement on bear market length standard, and different reports suggest that they may become shorter or longer. We could say that Greyscale’s estimate is as good as yours, after all it’s just a guess. Accurately predicting Bull or Bear in a long run beforehand is near impossible; you can learn that easy way or the hard way.
For example, by the end of 2021, many proclaimed cryptocurrency experts & crypto analysts announced the end of this 4-year market cycle for the price of Bitcoin and forecasted Bitcoin Super cycle. What has been happening since 2021 November shows a completely different story. A giant bear run and no super cycle. Lesson learnt: is impossible to know what the future may hold.
During the previous Bear Markets, we have seen 7 distinct phases. Remembering these different phases will help you see the current situation for the Bitcoin market more clearly and give you some perspective on what to expect emotionally in the coming months. Our best guestimate we are somewhere between “panic and accumulation/stabilization.”
Remember, Bear Market it’s not all doom and gloom. It is a necessary clean-up of unsustainable projects and a flush out of so-called crypto tourists. A lot of new people entered the cryptocurrency space in the past year or two, and the majority of these crypto tourists have already sold out their positions. Again, these tourists will be back in a year or two when the prices are skyscraper-high. It happened before and it will happen again. Prolonged downtrend volatility is not for everyone to handle and indeed is a hard task to deal with.
We’re at around 200M people globally in terms of adoption. Recently we’ve seen retail plays like Starbucks, Gucci, Nike, and others entering the space. The next big cycle will be real-world adoption led. Focus on real-world adoption during the bear market to be successful long term. You can never really know where the next thing is going to come from. Developers always know how to find the best platform to build on, so getting involved with great infrastructure puts you in a position to be part of the next big innovation even if you don’t know exactly what it will be.
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