As an active investor in the cryptocurrency market, you’ve likely gone through a number of ups and downs since digital currencies were first introduced to mainstream attention in 2013. Over the course of its existence, bitcoin has experienced four major corrections, with each low having a subsequent rebound. In this article, we’ll discuss what a bull trap is and what it means for crypto investors. We’ll also go into detail about the recent correction that bitcoin has undergone and why experts predict that this might be just another one of these recurring dips before the cryptocurrency market bounces back again.
If you haven’t invested in the crypto market and are wondering if the price will bounce back, chances are you’re not alone. Those who have actively been tracking the crypto market for a period of time have undoubtedly seen similar trends in short-term volatility and long-term price stability. Presently, we see a downward trend in bitcoin value after reaching its all-time high of $17,000 USD on December 17th, 2017. Many experts are predicting that by the end of this year, we will see a major rebound as the crypto markets finally stabilize. Before we dig into this theory, let’s take a closer look at what has happened in the cryptocurrency market since its birth. In these times when the bitcoin market is so volatile, it can be hard for traders to know if they’re waiting in vain. Fortunately, there’s a solution – Bitcoin Smarter will help you make smart decisions and stay calm no matter what happens!
How did the crypto market unravel?
In late 2013, the first cryptocurrency was introduced to the world as a means of payment. Bitcoin was launched as an alternative to government-backed fiat currencies and quickly rose in popularity within the digital community. Over time, an entire industry surrounding digital currency has emerged, one which is expected to experience rapid growth in 2018. A cryptocurrency is a form of digital money created through encryption techniques that control its creation and monitor how funds are spent. Cryptocurrencies use decentralized ledgers called blockchains to verify transactions.
A cryptocurrency is not controlled by any central authority, and this makes it an attractive alternative for those seeking a safe haven for their money to flourish. Blocks are created every 10 minutes, and each block comes with a hash code that contains the previous blocks’ third-party confirmation of transactions. The main purpose of a blockchain is to make transactions and information irrefutable, as well as commercially secure. This gives cryptocurrencies an edge over other forms of government-backed digital currencies.
Was that decline related to the turmoil in the regular economy?
Cryptocurrencies have become increasingly popular over the past decade. Countries have begun to legalize digital currencies for use as an alternative form of payment, such as in Japan and Singapore, which will likely bolster global bitcoin adoption. The legalization of virtual currencies makes it possible for people to store their wealth in an asset that cannot be controlled by governments or banks, like fiat currency.
The rise of cryptocurrency is also likely a response to the economic uncertainty that evolved after the 2008 Great Recession. Fewer people have faith in paper money which has resulted in a spike in demand for digital currencies. Bitcoin was introduced as the first decentralized currency that allowed users to make instant anonymous transactions. Bitcoin has experienced four major corrections since its creation, with the most recent one being one of the worst.
What happened to terra to make it crumble?
Terra was a project to make a “stablecoin” on the Ethereum blockchain, which would play to similar potential standards as bitcoin and other cryptocurrencies, being able to be exchanged with central banks and social accounts such as PayPal. However, the project failed to deliver and was accused of having a fraudulent token sale. However, rumors have suggested that the project is under a US probe for possible fraud, which should cause concern for those who are placing their faith in a new coin.
Terra’s failure to deliver is all the more worrying given that in 2017 alone, it raised nearly $600 million through an ICO (Initial Coin Offering) though some claim that its fundraising efforts were significantly exaggerated as part of an elaborate scam. Indeed, the project was launched in such haste that many technical experts believed it wouldn’t be guaranteed to take off from the offset.
Who are the winners and losers?
Those who have been involved in the cryptocurrency market since the early days of bitcoin understand what a bear trap is. These dips signify a period of volatility after which investors can expect the prices to rise again. However, this time around, this might be different. Experts predict that this could be one of several dips that bitcoin and other cryptocurrencies will face before their value stabilizes once again. The current crypto market is in the midst of a bear cycle, and many believe that the crypto bear will reach its peak during 2018. Many coin prices have been falling since January, with bitcoin trading below $8,000 USD.
Final thoughts:
It is also worth noting that bitcoin has experienced four major corrections and has recovered after each one. This is a sign of optimism, and experts are predicting that the price of bitcoin will rebound before the crypto market collapses once again. It is important to remember that these dips in which cryptocurrencies have fallen have often been seen as an opportunity to invest. During such difficult times, the real value of a crypto asset is tested, and this gives an investor the opportunity to profit.