Are We Headed For Another Crypto Winter?

For Bitcoin to remain pursuant to both the supercycle and lengthening cycle theories, it must undergo even more massive adoption before stabilizing at the top of its theoretical S-curve. As the industry appeared ready to capitalize on its recent expansion, Facebook’s rebrand created a new hype cycle around the metaverse narrative. Metaverse related cryptocurrencies and NFTs experienced visible growth in demand resulting in considerable value appraisal. In Q4 2021, metaverse dapps generated more than $330 million in NFT sales from more than 50,000 unique traders.

Bitcoin has lost 55% since reaching an all-time high of $69,000 in November 2021. Just a few weeks ago, the collapse of Terra, the second-largest DeFi ecosystem, left behind the most significant loss of wealth in modern history. Retail, institutional, and even corporate investors lost over $60 billion in LUNA and UST as the 7th and 10th largest tokens by market cap evaporated in a matter of days. This same bell curve can be used to identify the 4 phases found within a market cycle - the slow accumulation, the quick run-up, the plateau in price and the subsequent drop in price. This is a pattern that repeats time and time again across all markets. Alt Season is a time when gains are often made from investments in smaller-cap altcoins.

But since Bitcoin can be used for remittances, travel, & more, it’s perfect for migrants moving abroad. Doing your own research will help you minimize all the possible risks. And when you finally get the hang of it, you’ll see that it’s quite a ride.

Digital assets like cryptocurrencies are still in their infancy stages, maturing as we go along. They can be incredibly https://learn.bybit.com/investing/crypto-market-cycles/ volatile and not for the faint of heart. A similar story can be told of the cycles affecting other business sectors.

The cryptocurrency market has been known for its https://cryptoboarding.com/ high return on investments when compared to the traditional investment market, with Bitcoin outperforming every other major asset class in 2020. Though this may be the case, Ethereum actually outperformed Bitcoin last year, with some other, smaller-sized altcoins outperforming Ethereum. Previous bull cycles and alt seasons suggest that the industry begins to see pumps from larger-cap altcoins first, before smaller-cap coins begin to move. An altcoin season is not something that’s announced at a certain time or date, nobody knows for sure when it’s upon us, nor when it will end. There are, however, some indicators that can help calculate whether or not we have officially entered “Altcoin Season”. Ethereum, the second-largest cryptocurrency by market cap, is technically an altcoin.

The interpretation by YouTube user @uncomplication, who compared the BTC price action from the last few months to the Wyckoff distribution, was particularly insightful. The most interesting fact is that the YouTuber published his analysis on April 25, 24 days before yesterday’s crash. The total crypto market cap got rejected precisely off the highs from June 2019. Ultimately, I want to see some consolidation above $300 Billion and a push higher.

On a higher time frame there can be an opportunity cost to wait for a significant pull-back that never comes. This automates the process and forces the holder to sell after price has gone up and buy when price goes down. It still requires emotional control to sell an asset that is outperforming the rest of the portfolio. If you can identify these emotions both in yourself and other market participants then you’ll have the best chance of counteracting them.

Is This The Future Of Nfts?

When Bitcoin has had several days of parabolic moves, it’s often close to a peak or the beginning of a bearish trend. Additionally, the Bitcoin dominance would likely be showing a bearish trend, indicating that Bitcoin could be losing its dominance within the cryptocurrency market. Therefore, altcoins would be taking on more weight of the market dominance. With the better crypto market performance and increased regulations, institutional investors are becoming more comfortable investing in digital assets.