First and foremost, let us examine why the cryptocurrency market is declining. The crypto market’s rise or fall is determined by a variety of external factors, such as a market sentiment, statement from a major investors or government related news.
The price will rise or fall as a result of this. We need to understand how we should react in these panic situations if we want to be a great investor, earning a lot of money by playing with the market smartly.
Why the market is falling?
- The first and most important cause for the market’s decline are the Crypto cycles. The Crypto market runs in 4-year cycles which has been 3-years of bear and accumulation phase and 1 year bull market but there is a possibility of the lengthening cycle theory as well mentioned by many Crypto Analysts like Benjamin Cowen.
The market has also experienced natural 30-percentage-point drop everin every bull market. There was a market meltdown in 2013, then another in 2016, and yet another in 2019.
- In addition, India’s CryptoCurrency Bill is instilling panic in the public, which is one of the reasons for the price drop. The Bill is creating market uncertainty, which is why people are panic selling.
- The Omicron covid version is also to blame for the coin carnage, which has spread dread throughout the entire market. The fear of a new Covid variation is driving the market lower, but there are other variables at play as well.
You may be panicking and thinking, “What if I lose all of my money?” as the prices continue to fall. All cryptocurrencies, including Bitcoin, Ethereum, Dogecoin, Solana, Avalanche, Shiba and many other Alt coins have been declining since November, according to the last one month chart. However, it is very easy for these digital currencies to recoup their value if they receive some favorable news.
Understanding of the market:
We can understand the market by using two terms:
1. Bull market: We can see a rise and a dipping of the market here, but the dipping is confined to a certain point.
2. Bear market: In this case, the market will plummet to an unimaginable depth.
NOTE: The market is now in a bullish phase.
What we should do?
- You should use the Dollar Cost Averaging(DCA) strategy, which entails buying the coins in small increments rather than all at once.
- As the market is turbulent, you should do your homework before buying to determine which coin to invest in and which currency is more secure.
- Prices are decreasing, allowing us to purchase items at a low cost and subsequently stockpile them. The more we accumulate at a reasonable cost, the better it would be for us.
- We can’t anticipate if the market will go up or down, but holding is better at this time if you are not a day trader.
- If you are concerned, you can choose flexible staking over fixed staking so that you can withdraw whenever you want and your cryptos will be in your spot wallet in a matter of seconds. However, rather than panic selling, we should stake in to earn passive.