Are we in a crypto winter now? Here’s what you need to take care of CoinQuora

• The current bear market can last for 9 months up to 1 year.
• Stablecoins are experiencing a difficult test.
• The bottom is hard to predict, though there may soon be a jump.

The ongoing bear market in 2022 continues to destroy all cryptocurrencies, including non-fungible tokens (NFTs) and the decentralized financial market (DeFi). Many attribute the crypto winter to the ongoing months-long conflict between Russia and Ukraine, as well as the US Treasury Department’s recently imposed interest rate hikes.

However, the cryptocurrency would be left behind if it did not take into account the (LUNA) and TerraUSD (UST) tragedy and its impact on the larger market. Technically, Bitcoin’s weakened market sentiment has lost many people’s confidence in their claim to be a better hedge against inflation and volatility.

So what are the scenarios that may come into play in the near future? Is it time to leave the crypto market forever, or should people invest further without knowing how low prices will be?

Bear Market can last for at least 1 year

Many things are not safe today, but there is one thing that many can expect: the bear market may last for at least a year.

BTC / USDT 1-day chart from 2018 to 2021

Today’s crypto winter is reminiscent of the bear market 2018-2019, where and large cryptocurrencies thought after a euphoric race at the end of 2017. So far, this has been one of the most memorable bear markets because of its length and its impact on the crypto space as a whole.

Many people may remember that Binance was a novice during this time, even though it had a successful initial coin offering (ICO). In addition, the whole world was about to wake up to a new financial environment where cryptocurrency was more than just a buzzword.

Those who bought their first bitcoin at the top saw their portfolio lose its value to as low as $ 3,000 per share. BTC. In short, the bear market in 2018-2019 was brutal and bloody.

While the current crypto winter has many differences from the previous one, there is reason to believe that public sentiment is identical. After falling short of expectations of a $ 100,000 run, Bitcoin is now shrinking to less than $ 30,000. and are also at $ 1,900 and $ 260, respectively, which are prices not seen since July 2021.

Meanwhile, LUNA may have met its death, as it’s worth $ 0.05 at the time of writing – practically worthless now compared to its $ 119 ATH just a month ago.

Given the current predicament, it would be difficult to find a bull run case in the next few months. It will take about 9 months to at least a year for the market to get back on its feet.

Stablecoins are under a crucible

Stablecoins also suffer major blows. The UST price is currently less than $ .50, although there have been many explanations for the cause of this phenomenon. Moreover, UST is an algorithmically stable currency, which means that it is not really supported by anything truly active.

But even asset-backed stablecoins are not exempt from the carnage of the market. Specifically, (USDT) went as low as $ 0.98, which is uncharacteristic. This prompted Tether to press a third party to carry out a chain swap from Tron TRC-20 to Ethereum ERC-20 for USD 1 billion and from Tron TRC-20 to ARC-20 for USD 20 million.

The above chain swap was to balance the embossed USDT tokens across different blockchain networks. In the last 24 hours alone, Tether has recorded a transaction volume of about $ 175 billion.

While other stack coins like Circle USD (USDC) and Binance USD (BUSD) seem stable enough, it is still a fact that this class of cryptocurrencies is under tremendous pressure due to intense capitulation. It will also take longer before the situation becomes stable again before stack coins get a respite.

The bottom is hard to predict

While most cryptocurrencies have a huge discount right now, it will be difficult to predict how low the market will go. Leading altcoins like, ADA, DOT and AVAX are very cheap and many would be tempted to enter.

Traders and investors, however, must exercise caution as there is nothing to say what the bottom will be. For those familiar with the market cycle, many will agree that most cryptocurrencies are in the distribution phase. During this phase, people will try to leave their positions, leading to a continuous divestment.

Going forward, the current state is considered an unknown territory, especially for those who have just started investing in cryptocurrencies. It would be good to consider both basic and technical analyzes so that everyone can come up with a healthier investment strategy.

A bounce could soon happen

On a positive note, there is the possibility of a bounce in a week or two. Traders looking for a quick profit can expect the rejection and enjoy juicy rewards despite a bleeding market.

BTC / USDT 1-week chart with 5-wave, 3-wave movements (source: TradingView)

As seen in the chart above, Bitcoin has shown a 5-point movement recently. In addition, there is the possibility of another 3-point movement soon, where point A has already been identified.

Since there has been a lot of capitulation and with so much selling pressure, the market can expect a correction up to $ 55,000 (if the market is generous). However, it would be a long shot to claim that the recovery will last. There is a greater chance of making another decline if the market is unable to regain previous levels of support.

Disclaimer: The views and opinions expressed in this article are solely those of the author and do not necessarily reflect the views of CoinQuora. No information in this article is to be construed as investment advice. CoinQuora encourages all users to do their own research before investing in cryptocurrencies.

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