The cryptocurrency market has been characterized by changing drastically and unexpectedly, where even the most prepared and professional in the area of investments in digital assets are overwhelmed since their projections can change quickly, welcoming the fortunes of the new crypto millionaires. For most people, Bitcoin trading involves buying this cryptocurrency on a cryptocurrency exchange like Crypto Dezire.
Although it could also develop a downtrend that could catch any investor off guard and decrease their account vertiginously.
Such is the case of 2021, the beginning of 2022, where movements were evidenced that could surprise more than one taking their Bitcoin to unexpected prices touching almost 60,000 dollars. However, this year the situation has been the opposite.
After the undisputed rise in the price of Bitcoin, many investors came to consider the idea that the new value for the current year could reach USD 100,000.
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The reality is another; the upward trend took an opposite turn and has led Bitcoin to decrease its value by more than 50%.
The downward trend has affected not only cryptocurrencies but also those known as altcoins, leading investors and traders to establish new strategies and reorganize their investments, where the purchase of digital assets could be an option for those who want to obtain long-term returns.
A painful crypto winter for many
As is known from the analysis of various specialists, the movements in terms of the rise and fall of the prices of crypto assets have shown that these phases are usually cyclical and repetitive in every specific period.
The crypto winter being evidenced today has been considered to end in the year 2023, which has become a concern not only of cryptocurrency market users but also politicians and many individuals.
The long-term impact will be something that many will welcome, as it usually happens after winter, an uptrend that distributes considerable profits to all who have decided to invest.
What has made this crypto winter something completely different is that the economic and financial conditions of the traditional market have drastically impacted the valuation of crypto assets, even causing inflation to affect digital currencies. This situation was not considered possible.
Many analysts often suggest that Bitcoin could decline another 40-50% if European economic conditions do not improve, as these hurt the North American market.
A possible economic emergency in 2023 could cause drastic effects on Bitcoin and other cryptocurrencies or allow its price to evolve, considering that the energy crisis in Europe intensified, risky assets such as cryptocurrencies take a back seat in terms of investment interest.
The difference between the last bear market and the current one
In this case, the correlation of the economic and geopolitical effects worldwide has hurt the cryptocurrency market, which is why Bitcoin’s performance in the financial market is more like a risk asset than as protection against inflation.
It shows that the number of investors who sold their crypto assets had an inflationary reaction when they saw that their capital was decreasing. The economy was increasing consumer price indices to the maximum, making their investments insufficient to cover future needs highly inflationary environment.
The changes regarding the economic and financial measures taken by the government entities that control the economies may take a different turn. Still, the definitive evolution in the cryptocurrency market is not seen.
Two strategies to face the changes in the crypto market
The crypto assets market has not shown a shift in favor of an upward trend. Still, it has remained at a level that cannot yet be considered a strong floor that determines a radical change in the price of digital currencies.
That is why some of the possible strategies to make the necessary corrections in the face of a changing digital financial market are listed below.
- Evaluate investment options in volatile altcoins
It refers exclusively to the assets held in the investment portfolio; it is where the various pros and cons must be evaluated to define their risk level and rule out the options that may negatively impact the capital.
- Make long-term investments
It is interesting how the crypto market increases its value over time to the point that the profits often become millions; it would be interesting to consider this option, such as staking. Enter to Bitcoin-Prime trading system for more information.
