Has the crypto bull market peaked? Is history repeating itself?

With both Bitcoin and Ether down over 25% from their all-time highs, panic is spreading in the market.

Has the crypto bull market peaked? Is history repeating itself?

With Bitcoin and Ether both down more than 25% from their all-time highs, panic has spread through the market, with many investors fearing that the market has peaked and is starting to move into bearish territory. While such concerns are legitimate, cryptocurrencies may still have some room to grow and a new wave of institutional investment could prevent history from repeating itself.

With Bitcoin and Ether both down more than 25% from their all-time highs, panic has spread through the market, with many investors fearing that the market has peaked and is starting to move into bearish territory. While such concerns are legitimate, cryptocurrencies may still have some room to grow and a new wave of institutional investment could prevent history from repeating itself.

The market has been in freefall since Elon Musk tweeted that Tesla would no longer accept bitcoin as a payment method due to environmental concerns. Bitcoin has slipped from a high of more than $60,000 to $40,000, while ethereum has fallen from $4,400 to $3,400 in less than a week. As usual, most other cryptocurrencies are also following these two market leaders, causing the entire market to fall. This has worried some investors, who see this price action as the start of a bear market, similar to the sharp rise in 2017 followed by a 20% drop in early January, when fear in the market reached its highest level in a year.

Has the crypto bull market peaked? Is history repeating itself?

Since Bitcoin was introduced, it seems to have followed a pattern of a four-year bear market followed by a massive bull market, usually after Bitcoin has been cut in half. this was indeed the case in 2017, when Bitcoin rose nearly 20 times to $20,000 before the bear market began and lasted until early 2021. Typically, these bull markets last for about a year or so until the market starts to fall rapidly. However, the current bull market has been going on for about six months. In theory, this should mean that investors have another five or six months to worry about a bear market, but that may not be the case.

In addition, it seems that much of the recent demand for cryptocurrencies has come from retail investors who trade on Robinhood. This is clearly due to the sharp rise in the price of dogcoin, which was caused entirely by retail investors and Musk’s tweets. Unlike institutional investors, retail investors are more easily spooked by price drops, and a small drop in bitcoin or dogcoin could cause a chain reaction, with more and more retail traders selling bitcoin to cut their losses. While retail investors have played a key role in driving prices to new highs, they are also to blame for the rapid price declines.

On the other hand, Wall Street interest is growing with the influx of institutional investments such as Square, MicroStrategy, and Tesla. In addition, Bitcoin has reached record levels of popularity and recognition and is closer than ever to becoming the world’s digital currency. The influx of institutional investment may help stabilize bitcoin at a higher price, as companies like MicroStrategy buy tens of millions of dollars in bitcoin whenever the price drops. Unlike retail investors, companies and institutions tend to have a much longer-term outlook and are less affected by short-term price fluctuations. The stability these companies provide to bitcoin could be crucial to the long-term spread of this bull market.

Has the crypto bull market peaked? Is history repeating itself?

Popular cryptocurrency technologies have also improved since the 2017 bull market, meaning there is a more concrete reason behind the high valuations. Vitalik Buterin, the founder of Ether, has been quoted as saying that while the 2017 price rise seemed to be driven by speculation, there are now a number of more fundamental factors that make Ether and other cryptocurrencies potentially worthy of their market capitalization, such as DeFi . Now that the top cryptocurrencies are disclosing working products, their valuations are less rooted in speculation, so the inevitable price declines are likely to be less dramatic. Cardano, for example, reached $1 in the past bull market without even having a valid blockchain, but is now over $2 and plans to launch smart contracts in the coming months.

One of the most common statements made by investors is that “history doesn’t repeat itself,” which can be said in two different ways in the market. One is that the market won’t give us a year of bullish sentiment until it’s down and $60,000 is the high point. The other is that we are entering uncharted territory and that the bull market will last much longer than normal. In any case, the long-term outlook for Bitcoin and other cryptocurrencies remains positive, with zero price impact on technology or use cases. It is important to remember that falling prices will not stop governments around the world from seeking to use cryptocurrencies in their monetary policies, nor will it stop Visa from using Ether for payments. While the short-term price is attractive, it is by no means the driver of blockchain technology, which promises to one day revolutionize the financial industry.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/has-the-crypto-bull-market-peaked-is-history-repeating-itself/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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