While BTC and ETH managed to “only” lose around 60% of their value since their highs, numerous leading altcoins have lost more than 90%.

The recent collapse of UST and LUNA has sent prices crashing, as investors received a stern reminder of how risky cryptoassets can be.

Needless to say, crypto investors are feeling uneasy. According to the Crypto Fear & Greed Index, they are actually “extremely fearful.”

But that doesn’t mean investors have to leave crypto and wait for the next bull market to jump back in.

What can crypto investors do now?

It has been a difficult year for crypto investors (well, stock investors too), especially those who have only entered the market recently and are experiencing their first market downturn.

Let’s take a look at what investors can do during this crypto bear market.

Crypto bear market 2021

Buyers are getting exclusive rights to an item but often at a very high price for something that one can find all over the internet (i.e., a video from a professional basketball player). As a result, it’s unlikely the market could attract significant capital from investors long term. Regulations haven’t caught up with other possible uses like in real estate, so while NFTs are an innovative way to store something like a land deed, the practice needs greater industry and regulatory approval before taking off.

Staggering environmental concerns

Moving back to Bitcoin, the energy cost of mining it has gotten out of hand.
Because Bitcoin’s reward keeps on halving, miners need to keep upgrading their equipment to stay profitable.

Crypto bear market 2021 reddit

Indeed, this seems to be on the cards, presenting those who have stayed on the sidelines with a chance to gain some great entries.

Crypto Sentiment Rock Bottom

However, it’s not just technicals that identify a bear market. Crypto sentiment is rock bottom, with people only discussing cryptocurrency in negative terms, such as Bitcoin dropping in price or the Terra crash, which is exactly what we can expect at times like this. We only need to look at the transfer of money out of DeFi protocols as an example of the fear in the market – we’re now back at February 2021 levels:

Source: defipulse.com

The macro environment is toxic too, with the Federal Reserve likely to announce hefty interest rate hikes and quantitative tightening until it can bring inflation under control.

Crypto bear market 2021 prediction

Because HNWIs do this, the value of artwork can also become grossly inflated.

But the demand is not replicable when it comes to NFTs. First of all, most non-profits don’t even accept cryptocurrency. What’s more, there is a lot of confusion as to NFTs’ classification.
Suppose the Internal Revenue Service determines Sarah’s NFT was acollectible instead of an intangible capital asset, then tough luck. In that case, she could only deduct her cost basis($5 million) for her donation — resulting in a redundant transaction. Until there is greater clarity about how they are classified under the tax code, there is little inherent value to NFTs based on the Ethereum blockchain.
On a side note, it’s probably in the best interest of Uncle Sam that it stays this way.

Meanwhile, their utility for digital art collectors is very controversial.

Crypto bear market 2021 september

Bear markets are becoming shorter in duration, but so are bull markets

Get used to range-bound price action, institutions love it

— tedtalksmacro (@tedtalksmacro) January 9, 2022

Historically, previous bear markets were followed by a short-term increase in prices until the uncertainty and fear among traders stopped. The Bitcoin Fear and Greed Index, an indicator of trader sentiment towards the asset, indicated “extreme fear.” This is synonymous with a bear market.

FXStreet analysts have evaluated the Bitcoin price trend and predicted that the asset is at risk of crashing to $37,000.

Bitcoin bear market 2021

Bitcoin price suffered the most significant one-day drop in price as liquidations hit the $1.3 billion mark within an hour over the weekend. The price drop has wiped out the asset’s gains in the two-month-long bull run.

Analysts have noted a similar trend in Bitcoin price nearly every bull run.

@TechDev_52, a cryptocurrency analyst, has observed that the bull run in 2011, 2013 and 2017 has ended with a red month followed by 2 or 3 months of the Bitcoin price rally.

@TechDev_52, therefore, believes that the Bitcoin bear market has not started. Another renowned analyst and YouTuber @CryptoMichNL believes that the current Bitcoin price rally is a supercycle.

A supercycle is a phenomenon where a market security’s price increases for decades.

Cryptocurrency bear market 2021

The analyst notes that just as cryptocurrency prices don’t go up in a straight line, similarly, they don’t go down in the same manner either.

Some of my favorite rallies to trade occurred in a bear market.

Not saying we are in a bear market, maybe we are, but just like things don’t go up in a straight line they don’t go down in a straight line either. pic.twitter.com/69gm4HedSY

— Mayne (@Tradermayne) January 8, 2022

@tedtalksmacro notes that both bull and bear markets in the cryptocurrency ecosystem are becoming shorter in duration. The analyst recommends that traders get used to range-bound price action.

When will crypto bear market start 2021

Bear markets are becoming shorter in duration, but so are bull markets

Get used to range-bound price action, institutions love it

— tedtalksmacro (@tedtalksmacro) January 9, 2022

Historically, previous bear markets were followed by a short-term increase in prices until the uncertainty and fear among traders stopped. The Bitcoin Fear and Greed Index, an indicator of trader sentiment towards the asset, indicated “extreme fear.” This is synonymous with a bear market.

FXStreet analysts have evaluated the Bitcoin price trend and predicted that the asset is at risk of crashing to $37,000.

Ethereum bear market 2021

A great example is how coinbase has created an NFT platform (coinbaseNFT) for creators to mint and list their unique pieces while making it accessible to other platforms such as opensea.

Are we in a Crypto Bear Market?

Crypto still falls into the same pitfalls and swings that industries do due to fiscal policy and global affairs. Due to the recent global climate, it’s certain that we are in a bear market. Historically, many experts anticipate bear cycles depending on previous data such as bitcoin’s halving, the total volume of cryptocurrencies and NFTs being traded, and much more.

Nonetheless, a bear market is not preventable and it always takes a toll on new user adoption, established organizations/companies, and startups.
With the interest rates hike, we have seen the traditional market take a hit which also affects the general crypto market.

Bitcoin bear market 2021 reddit

  • Social trends data from Santiment confirms that cryptocurrency may be in an official bear market.
  • Mid-May 2021 was the last time when bearish sentiment was prevalent among investors, implying capitulation.
  • Analysts note that cryptocurrency bear markets are becoming shorter in duration, just as bull markets.
  • Analysts believe that the cryptocurrency bear market has arrived based on social trends and investor sentiment. Proponents argue that the current bear market is shorter than previous ones.

    Traders believe that the crypto bull market is over

    Based on data from crypto intelligence platform Santiment, social trends from traders confirm that cryptocurrencies are in an official bear market.

    Next crypto bear market 2021

    The Grayscale Investment Trust, he said, now accounts for 3.5% of the supply and only allows for BTC inflows into its cold storage, as when shares are traded the coins themselves don’t move.

    Woo also noted that the leverage market grew in size over the last few years and allow for traders to speculate while moving a smaller amount of coins. He also pointed out that bitcoin’s use moved from a currency to a store of value.

    This cycle is different; the movement of coins to strong holders is unprecedented.

    Chart: purple line tracks coins moving between weak and strong hands (running total over 128 days)

    Raw data: @glassnodepic.twitter.com/xbqSMljCdC

    — Willy Woo (@woonomic) May 9, 2021

    As CryptoGlobe reported, earlier this year Woo said bitcoin could flip gold’s market capitalization.

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