Cryptocurrency markets are undeniably bearish, but some industry insiders believe these conditions will shake off bad actors and create greater opportunities for future entrants..
Traders tend to lament negative price action and the relative difficulty of executing profitable trades in bear market conditions. Nevertheless, several top analysts and builders agree this is the time to make moves that will lead to the biggest gains when bullish sentiments return.
Polygon co-founder Mihailo Bjelic told CNBC on Friday that the current drop and the recent big sell-off earlier this month were just what the market needed.
Bjelic believes the market became “maybe a little irrational, or maybe a little reckless” as the total cryptocurrency market capitalization grew 12.5 times between November 2019 and November 2021.a tremendous growth rate that outpaced most other traditional markets:
“When moments like this come, [una] correction is normally necessary, and at the end of the day [es] healthy.”
Right now, the market is in the midst of a major correction. Since last November, the total market capitalization has fallen by 60%, from USD 3 billion to USD 1.2 billion, according to CoinGecko. Cointelegraph reported on Saturday that traders are still expecting more pain, especially considering that the last bear market sent prices down around 80% overall.
Crypto market analyst The DeFi Edge added context to the idea that bear markets bring gains that remain in line with the interests of most market players. The account tweeted to its 164,000 followers on Sunday that “bear markets are healthy for crypto growth.”
This line of reasoning is based on the observation that fewer new market entrants, who fraudsters see as potential targets, enter during a crash. In the past year, bitcoin (BTC) transaction volume peaked on November 9 at 335,411, coinciding with the price peak. On Sunday, transaction volume dropped by 38% to just 207,859, according to Blockchain.com..
Less activity means fewer opportunities and lower profitability for many scams, so they tend to disappear.
Bear markets are healthy for the growth of Crypto.
The deadweight gets removed and Crypto can soar to new highs. pic.twitter.com/5wKEzHxy6B
— The DeFi Edge ️ (@thedefiedge) May 28, 2022
Bear markets are healthy for cryptocurrency growth. The dead weight is removed and cryptocurrencies can soar to new highs. pic.twitter.com/5wKEzHxy6B
Jason Ye, a partner at cryptocurrency investment fund ROK Capital, explained that Although prices and activity are lower, bear markets represent prime times for traders and builders to lay the groundwork for further success when market sentiments reverse. He told Cointelegraph on Monday that “In a bear market, it’s time to find the best fundamentals and focus on building a product”:
“It is time for traders to deploy their cash reserves to get a jump on the next bull cycle. As always, the winners in the bull market are the people who built in the bear market.”
The creator of games on the Neo Tokyo Metaverse gaming platform, Alex Becker, echoed of Ye’s idea in a tweet on Saturday. He also believes that bear market buyers are the ones in the best position to profit during the next bull market. He said that “all money is made by buying in a bear market. Most losses come from buying in a bull market.”.
Becker added that buying low and selling high should be the key driving factor for cryptocurrency market participants. Additionally, he suggested that people on Twitter are the most unpleasant during a bear market, which he called “ironic.”.
The funniest I’ve realized about crypto twitter is everyone gets toxic and bitter as fuck in a bear market.
Which is ironic because all the money is made Buying in a bear market.
Most losses come from buying in a bull market.
Shows how ass backwards this place is.
— Alex Becker (@ZssBecker) May 27, 2022
The funniest thing I’ve ever noticed about the crypto space on twitter is that everyone gets toxic and bitter as shit in a bear market… Which is ironic, because all money is made by buying in a bear market. Most losses come from buying in a bull market. It shows how retrograde this place is.
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