The two biggest currencies by trading volume and market capitalization, Bitcoin and Ethereum have seen massive fall from the huge FTX crash. Bitcoin is now almost trading at its lows around $16,000 levels, and, similarly, ETH, which made its yearly peak around $4,900 levels, is now trading at $1200 levels, as on December 20, 2022. For example, you bought ten of a certain coin for $10 a piece, and today it dropped to $8.
FTX’s bankruptcy, and its spat with Binance, has not only triggered a huge sell-off in the market but has also reduced liquidity from the crypto market. Regulatory uncertainty can also have a significant impact on cryptocurrency prices. Governments around the world are still trying to figure out how to regulate the crypto market, and until they do, investors may be wary of investing in cryptocurrencies. This can lead to a decrease in demand, which can cause prices to dip. The crypto market is highly volatile because it is still relatively small compared to other financial markets.
Presently, the coin trades at $13.24 at the time of writing, about -94.93% from its all-time high. Bitcoin has maintained steady growth since its inception in 2009 and currently stands as the largest cryptocurrency worldwide. Although its price is down by over 75% from its all-time high, experts expect a gradual, token recovery in the coming months. So, purchasing them anytime could be risky, especially during a dip that promises no end.
This kind of investment works well when the market is up, but doesn’t work so well otherwise, as they cant unlock their positions to give funds back to their users. As a response to the pandemic, the Fed has been pumping in money and cutting interest rates to zero to stimulate the economy, which means artificially increasing demand. The Fed’s main job is to manage the monetary policy of the US. The goal is to keep the economy well balanced, and the main tools for them to do so are money printing, and playing with interest rates . In order to maintain the big picture, and be rational despite the market volatility, what is working best so far for me is to keep educating myself on what is happening, why, and connecting the dots.
When buying the dip, crypto investors should proceed with extreme caution. The price of the leading cryptocurrencies are tumbling lower today thanks to the pending liquidation of Silvergate Capital, a crypto-friendly bank that is winding down operations and liquidating this week. She has more than a decade of experience working in news, public relations and communications. In the past, she has worked with CNBC Awaaz, CryptoWire, among others and has covered beats including insurance, personal investments and cryptocurrency. She is a travel enthusiast and would like to visit every country and try as many different culinary specialities as possible.
When should an investor buy the dip?
Crypto prices aren’t doing so hot on Wednesday and we’re diving into the latest cryptocurrency news to find out why. For every asset class, money changes hands between retail and institutional investors and this tend to happen in cycles or after a significant bull or bear run,” Cavendish told FE Online. Bitcoin price has slumped to $43,030 from the high of over $47,700 on the 1st of January 2021. The prices of other popular crypto tokens like Ethereum, Solana, Cardano, Binance Coin etc also appear to be in a free fall since the start of the New Year, according to CoinMarketCap data. We are putting together a team of very qualified cryptocurrency experts who understand blockchain technology at the most granular level, and who are researching cryptos all day, every day.
In some cases, the price of the cryptocurrency could return to its previous level and above it following a market correction. But, sometimes, crypto dips may linger, cutting off the possibility of making profits from the token’s value. A dip in cryptocurrency occurs when the value of a crypto asset falls.
One thing to mitigate the risks involved is to use the signal line. If a cryptocurrency has a known uptrend, its lowest point should never cross this line. Once it does, the coin in question might have entered a downtrend, which makes everyone who bought the dips losers.
Recently, it came close to the $50,000 mark, and lots of bullish sentiment had built around Bitcoin’s return to form. Over the weekend, however, Bitcoin refused multiple times to cross the $50,000 threshold. This is prompting some to take profits and flee, thus lighting the fuse of a big crypto selloff. Receive payments from your customers via debit/credit cards or bank transfers and settle these payments to your Fincra wallet or your bank account.
However, the volatile nature of the cryptocurrency market means that prices can move up or down quickly. Post the aftermath of FTX, it is highly recommended to always invest in something which you understand wholly and which is regulated. It is also recommended to invest only 5-10% of the portfolio in digital coins. Cryptocurrency, which is known for its extreme volatility, has witnessed a tumultuous time in 2022. The prime reason for the market downturn is the downfall of one of the largest global cryptocurrency exchanges, FTX.
Why Is Crypto Down Today?
The widened discount posed and still poses a short-term risk for Bitcoin according to Arcane. In 2021, Elon Musk and his electric car company have been huge contributors to the growth of Bitcoin and other cryptos, especially Dogecoin. Coming from a leading crypto figure, the news was devastating, sending Bitcoin and Ethereum spiralling downwards. Last time, we talked about when you should sell your crypto and setting targets.
While the majority of tokens were in pull-back mode, QuickSwap has quietly gone on a solid run. Loopring has clawed back some of its loses since November and is up more than 11% while the rest of the markets appear to be crumbling. And the governance token for the Alchemix protocol, ALCH, is also on the rise.
The commonality of these projects is that they are all “trust-based” companies, aka centralized. And when the decision makers get too greedy, they try to speculate more than they can afford. It tends to work out fine when market is doing good, but when the sentiment goes negative, they fall majestically. When they fail to do so, the platforms had no choice but to liquidate their positions, causing the markets to further dump. 3AC is one of the bluechip hedge funds in this space, with over 3 billion worth of crypto under management as of April 2022.
Although not the news that sparked the drop, it added more fuel to an already raging fire. One of the major causes of the crypto market dip was fuelled by the People’s Republic of China. On Tuesday, China announced that financial institutions and payment companies have been barred from providing any services related to cryptocurrency transactions.
So, after purchasing the dip crypto, you may get a little return on investment. The freezing of transfers and withdrawals by a crypto lending platform, Celsius Network, in June 2022. The occurrence was a result of the tight financial condition of the platform at the time. If this trend continues, the current sell-off poses a bearish outlook for XRP price in the coming weeks. Very well written and something that I personally was looking for in order to understand the current plays in crypto space. And voilà, here again we see why there is so much sell-off of Bitcoin that can drag down prices even more.
While there have been credible successes with this method, it remains a working theory. In reality, there’s no foolproof way to know what an asset will do. With banks closed over the weekend, some traders may struggle to pay off the borrowed funds because they can’t move money into their accounts, triggering sell-offs from exchanges, Shams said. These weekend dips may have significant effects as regulators weigh the future of digital currency, experts say.
Articles by Matthew Makowski
Other speculative assets like stock futures and gold are also affected likewise. The US dollar, however, continues to benefit from the panicky market. Last week, the US government announced its biggest interest rate in over 20 years to fight the double-digit inflation. In that same vein, the US government also mentioned that it has begun reducing its balance sheet.
Facebook and Instagram will join other social media platforms like Twitter, YouTube, and Reddit which are presently implementing NFTs on their sites. Instagram is the latest social media platform to fall for the NFT FOMO. Moreover, its wide adoption makes it a promising token for both present and potential investors. Also, wisely and carefully choosing a cryptocurrency to invest in will help you avoid the pressure of possible loss. You can miss out on additional gains if the token price falls beyond your predictions. Although the market projected some bullish actions months back, the recent crash of the FTX exchange rekindled the bearish trend.
Mr. Duggan is a graduate of the Massachusetts Institute of Technology and resides in Biloxi, Mississippi. Gensler famously said in June 2022 that crypto exchanges that don’t cooperate with the SEC are “operating outside of the law” and may be at risk of enforcement action. In addition, New York State Attorney General Letitia James filed suit on Thursday against crypto exchange KuCoin, arguing that certain coins traded on KuCoin should have been registered as securities. Bitcoin, the world’s largest currency, soared to an all-time high of $69,000 in November 2021, then reached at the levels of $47,000 in January 2022, is now trading below $18,000, post FTX downfall. Similarly, Ethereum, which was at its record high of almost $4900 in November 2021, has now fallen to below the levels of $1300.
The only problem with this strategy is it’s only good for long-term investments. People who use this technique have a clear and precise vision of how the asset will behave way down the road. These types of investors are unfazed by downtrends and will buy the dips with unyielding conviction. “What we’re looking at now is the rotation of money from retail investors to institutional investors. Alexander Cavendish, CEO of hedge fund Hedonova attributed the current fall in crypto prices to the rotation of money from retail to institutional investors. Right now, the cryptocurrency market is entering the second wave.
Example of crypto dip
Once you have selected a cryptocurrency exchange of your choice, then you need to register yourself by providing the personal information such as your name, address and complete KYC formalities. FTT, the native token of FTX was the backbone of the FTX exchange, has hit rock bottom amid the FTX scandal. FTT which was seen at $26 on September 1, 2022 is today trading at its lowest around below $1.
Forget following Reddit and buying meme coins because “everyone else is doing it.” You have to actually do your homework. You have to dig through the whitepapers, read them end-to-end, understand the technology, talk to experts, and extrapolate financial implications. Hyped-up investors high on growth adrenaline rush into the space.