May 2022 was a ‘disaster’ month for the global cryptocurrency marketplace. However, even a bitcoin code official site https://bitcode-prime.me/ has a partial recovery that does not seem to be in the offing this month. The marketplace is still on its bearish trajectory, with coin after coin succumbing to volatility.
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What is a Bear Market?
Sometimes, the crypto marketplaces expect reduced prices for diverse coins. These price declines are not short-term, but last for a long time. It is when investors/traders begin to use the terms, bearish run, or bear market. Additionally, the prices of securities dip below 20%, or even more, right after recent hikes. As a result, an atmosphere of pessimism and negative sentiments persist in the marketplace.
In general, a bear market refers to a decline in an overall index/market, such as the S&P 500. However, even individual commodities/securities may also be experiencing a bearish run, if their prices are reduced by 20%, or even beyond.
A bearish trend may come to the fore, for various reasons. One of them is an economic downturn or a sluggish economy. Even the interference of the government may result in the appearance of a bear market. Other causes include geopolitical crises, bursting market bubbles, shifting to an online economy, ongoing pandemics, and sudden wars.
Bitcoin Facing Disaster
Currently, the hot topic of conversation amongst experienced and knowledgeable observers from the crypto world is Bitcoin’s slide. It is the worst that it has witnessed, since the coin’s appearance in the crypto world in 2009. Thus far, it has been a hot favorite amongst investors, whether beginners or experts. However, if they begin panicking, then they might decide to begin dissociating from it, and soon!
Recently, Bitcoin’s price slid down by as much as 17%. Its pricing was $22,603, revealing that the reduction was lower than the average investor cost base of $23,500. Admittedly, this suffices to cause long-term investors to worry. According to UBS’ head of foreign exchange and crypto research, James Malcolm, crypto enthusiasts have begun to lose courage after seeing the bearish run of Bitcoin. Furthermore, miners are witnessing their businesses be under high pressure, thanks to the rising costs of energy, as well as CAPEX commitments. They may begin to go on a selling spree.
Added to this, is the misery incurred by Valkyrie Bitcoin Strategy and ProShares Bitcoin Strategy ETF (ticker BITO). They launched towards the end of 2021, and have already suffered losses worth 20%. Even MicroStrategy Inc. lost by 25%. Such news is causing owners of digital assets to become spooked.
Celsius Network Ltd., a lender of cryptocurrencies, has halted withdrawals, transfers, and swaps. Then again, other digital currencies are also suffering. These events have prompted the senior financial markets analyst at City Index, Fiona Cincotta to hint at more downswings. Bitcoin may even go below $20,000. Even now, the coin seems to have wiped out all the gains and fame that it had garnered over the years, and come down to the level it had been at during the end of 2021. Even the number of Bitcoin addresses that were anonymous has been steadily reducing.
Malcolm UBS reassures users that such crashes do not indicate a complete closure of the crypto ecosystem. However, the future may appear different, wherein regulations will have to come into play.
The CEO and co-founder of the DeFi platform, Alex, Chiente Hsu, believes that high volatility governs the crypto sector. Therefore, it is bound to lose some projects. However, there will not be any systemic risk.
Polkadot Loses Its Position Amongst Top Ten
Other top coins have been losing their worth over the last couple of weeks. Bitcoin, of course, is the worst sufferer. However, even Ether is priced very low, at $1,100. It means that 40% of its importance has lessened. Joining it, are other cryptocurrencies, listed amongst the top ten. Unfortunately, Polkadot, which had an envied position in this list, has been pushed out. It is now at #11.
Several coins, which were outside the top 10, are showing signs of profits, albeit small. The range of gains is between 2% and 4%. The coins include Bora, Helium, etc. Even Theta Network and Elrond, are amongst the winners. SIRIN from Sirin Labs, is a big winner, too.
The losers include Flow, Nexo, and THORChain.