Photography: Voytek Pavlik
The market of digital assets is still emerging, which is the reason for its instability and volatility. Every single change in the media and news background can shake the market and cause prices to drop or rise. It happens like a snowball effect – people start to leave the market in masses and reduce demand, which causes other people to withdraw their funds, dropping the demand further. That is how the bear trend develops. It is characterized by panic, mood and frustration; rates drop and collapse. However, every bear trend is replaced by a bull tendency sooner or later. As many experts predict, the year 2023 is expected to be a bull run. So even though crypto prices today are reaching their bottom, it is an excellent time to think about buying digital coins as long as their prices are low.
The bear trend period allows investors to pick the most promising crypto assets. It is simple – those surviving the crypto winter are strong projects worth investing in. The bear trend helps to filter worthy projects from weak ones.
Why Has the Crypto Market Dropped?
In 2022, all crypto dropped for the following reasons:
• The news background was not favorable
• FED increased rates
• Binance temporarily blocked withdrawals
• Crisis and inflation.
All these factors caused pessimistic investors’ moods, and they started to leave the market, causing a snowball effect and leading to a crypto price drop.
Another massive collapse occurred when the well-known crypto exchange FTX confessed its financial problems in early November 2022. Then investors started to leave the platform and cash out money from it.
As we can see, the news background plays a crucial role in changing the relationship between demand and supply for crypto assets. Since the market is still young, people are cautious about it, so they are easily driven by gossip and hype, buying and selling coins equally massively, which causes such shart market fluctuations and trends changes. We recommend drawing your own conclusions based on research and in-depth analysis of every specific crypto project. It is the best way to understand whether it is worth investing in.
