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Why Are Cryptocurrencies Crashing Today?
12/07/2022
Why Are Cryptocurrencies Crashing Today? This is a question that new investors usually have, after all, bitcoin and altcoins can be extremely volatile depending on the moment you are in.
Why Are Cryptocurrencies Crashing Today?
Why Do Cryptocurrencies Fall?
What could be happening in the Crypto Market that all digital assets are falling? - In general, both bitcoin and other cryptocurrencies (with the exception of stablecoins that are linked to fiat currencies or gold) can be extremely volatile, this will depend not only on the economic scenario in which you are, but also on the geopolitics.
There are cycles that cryptocurrencies, by law, go through: the low cycles and the high cycles. To better understand this concept, if you have any doubts, we will leave this article HERE for you to read.
Cryptocurrency prices fall for a variety of reasons, whether due to a breakdown at a brokerage firm, a real estate crisis in China, or even: a ban on miners in some country. But just as cryptocurrencies fall, they also rise for several reasons: government currencies losing their value, investment funds that started to make bitcoin and ethereum available...
Therefore, if you are new to the cryptocurrency market, do not despair. Falls have happened in the past and will always happen in the future, the important thing, in this case, is not to be emotional and sell your assets for fear of bitcoin going to zero: when an asset falls a lot, it also tends to rise a lot as soon as the emotion of the moment pass, can you understand?
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Why Do Cryptocurrencies Fall So Much?
Why Do Cryptocurrencies Fall So Much? This question is not so difficult to answer, after all, the cryptocurrency market is extremely new, with that, many investors: both sardines and whales have a lot of distrust in most assets (which is normal), so when negative news is published , this news could end up causing market chaos.
This is due to the low market cap of cryptocurrencies: a few million dollars per asset... older and consolidated projects like bitcoin and ethereum have billions of market value, therefore, they are more stable.
If bitcoin drops 15% in one day, cardano or shiba inu tend to drop 30, 40%, everything will depend on the dominance of the altcoin at that exact moment. Therefore, the more the crypto market consolidates and the more volume it has, the more stable and less volatile it will be. It's like Gold (which is the most valuable asset in the world): it is extremely stable, as it has a market value of trillions of dollars.
There is also, in the cryptocurrency market, a concept called "crypto winter" which is when interest in cryptocurrencies decreases and assets drop A LOT. To give you an idea, at this moment, assets such as Solana and Polkadot have already lost more than 90% of their value since their historic peak!
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What to do when Cryptocurrencies are Crashing?
What to do when faced with a big drop in the cryptocurrency market? - Simple... stay long and keep accumulating to make a lower average price. If you invest in good assets, why be afraid of falls? They are part of a cycle and there arise the best opportunities in years.
If it's in an uptrend and bitcoin is close to the halving, don't make the mistake of selling it. There is a phrase that says: "bitcoin is only bought, not sold". So, if your goal is to hold, stick with it and keep buying bitcoin cheaper; when the asset not only returns to previous levels but surpasses them, you will have made good profits, but for that, the interesting thing is to aim for the long term!
Are Cryptocurrencies Falling Today? Do not freak out! Take the opportunity to improve your average price: is it more interesting to buy bitcoin at $60k or $20k?
We recommend: The Best Cryptocurrency Broker
Lucas Lippe
The idea of freedom is fascinating and Bitcoin gives us that in many ways. Explaining ideas of a decentralized web on the Bitcoin Lovers website.
