Talk about Cryptocurrency today, and you will likely hear how the Cryptocurrency market is falling down.
Without going into the tenuous value of the other assets, the fact Cryptocurrency is not backed by any real element with monetary value is not the reason why Cryptocurrency is losing its footing.
Bitcoin’s price has dropped below $40,000 for the first time in 2022. Likewise, the price of the other Cryptocurrencies like Ethereum, Solarium, and Ripples appears to be experiencing free fall.
As we speak, the current market price of one Bitcoin is $38,476. The falling Cryptocurrency prices have dampened the celebration mood of the investors.
Despite there being an uproar in the market on Bitcoin’s falling prices, Crypto enthusiasts like Infinity system believe that this is a common thing in the Crypto industry.
In fact, the sudden price drop might be an opportunity for new Crypto traders to enter the market.
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What Does This Price Drop Mean To Crypto Investors?
For investors who have been in the Crypto trade market since the beginning and have invested a fortune in Bitcoin, swings like this signify that the Crypto market is performing well. Big dips are nothing to be overly worried about.
Experts recommend keeping your Bitcoin assets. Keep your Bitcoin portfolio below 5% if you have a low-risk tolerance. Doing so, you can rest assured that even if you accrue a loss, the loss will not be huge enough to worry you about.
Remember, investment is all about taking risks and being prepared to lose what you invest. If you are investing a sum that will not affect your other financial goals, just hold your Bitcoin asset.
Here is a quick tip: Just don’t check it. Checking the price fluctuation will only fuel your emotion and force you to make decisions based on your emotion.
Why Is The Crypto Market Down Right Now?
We understand that the current collapsing market might trigger your emotion and force you to make decisions that you might regret later on. Well, this can be avoided if you know what changes are causing the sudden price drop.
1. Many View Cryptocurrency To Be Short-Term Investment
Most investors believe that Cryptocurrency is a short form of investment because of its volatility. And this can be one of the reasons why the market has dropped dead in January 2022. When the majority of investors follow this method and sell all their crypto assets, it brings dampness to the market.
2. Market Manipulation
One of the ways for Crypto investors to make a profit out of Crypto is by following ‘Pump-And-Dump’ schemes. This is a Cryptocurrency Slang that is used to determine the practice of inflating Cryptocurrency only to sell at its peak.
3. Lack Of Liquidity
Lack of liquidity still plays a major role in price fluctuation. People are still finding it hard to trust a digital currency backed by nothing completely. Perhaps, this is the reason why Bitcoin Whales and or large buys influence the market.
4. Security Still Remains A Major Concerns
The Crypto market has always been a haven’s ground to play with their scams, phishing, and Ponzi schemes. Despite being in the market for over a decade, security still remains one of the major concerns.
This is because stealing funds from the exchange is a lot easier than stealing money from banks.
5. Correlation With The Stock Market
Part of the beauty of Bitcoin is that it needs to remain uncorrelated to the asset. That means it needs to float freely divorced from any other assets. But that’s always not the case.
Over the last couple of years, Crypto trading markets have become intertwined with traditional markets due to their traditional adoption.
Bitcoin Price Crash – One Step back To Take Two Step Forward!
Bitcoin has always followed this pattern of dropping to almost nothing and bouncing back stronger, hitting new milestones.
Perhaps, this might be the same pattern.
If you are thinking of investing in Bitcoin and other Cryptocurrencies, this might be the perfect time to enter the Crypto trading market.