There’s no doubt about it. The cryptocurrency market is having a hard time getting it’s feet back. After the historic 50% pullback that Bitcoin did on Wednesday, there are many veteran traders and major influencers who are concerned about the temporary conditions of the market. Some are expecting a crypto bear market.
As of right now, it looks like Bitcoin might fail to close at crucial support levels that could see it drop back down to 30k.
The positive outlook to take from here is that Elliostrades pointed out that if Bitcoin takes another big dip, the best has yet to come. In other words, regardless of the short term conditions of the market, crypto’s future looks promising. The important thing to recognize is that if you zoom out, nearly everyone is bullish on the grand scheme of things.
These short term cycles of “bull” and “bear” as we call them are only temporary. And you have to consider that the crypto market has grown explosively both this year and since Bitcoin was first on the market. It seems clear that there is only one direction which is up. In the meantime, we will see a lot of ups, downs, and sideways movements. There will be times where almost everyone in crypto is really shaky and everything is plain boring with no pumps.
But this correction is a sign for a healthy market. As Elliostrades mentioned many times in his videos, healthy markets have to have recessions and pullbacks. It’s not a straight rocket to the top ever. If the pumps never ended eventually the whole market would crash to a point where it couldn’t recover.
What can we expect in the coming weeks?
It will likely take time before things heat up again. The market needs to take a break and heal. Unfortunately, it seems like meme coins have done more harm than good. Meme coins created a environment in crypto that didn’t make sense. People were getting 100x gains in a day on coins with zero fundamentals. Markets like this can’t be stable. Hopefully, what will happen in the coming weeks while it might be bearish… is that the market “rinses” itself as Elliostrades says in the tweet above. The market needs to shake projects and tokens which have no value or value proposition. The general public does not understand crypto and the revolutionary technology behind blockchain and DeFi. But in the coming weeks we should see fundamentally strong projects hold up and recover from the crash. At the same time hopefully this rinse will weed out the meme coins which bring no value to the crypto space and the world in general.
Even the crypto veterans cannot predict where the crypto market is going. It is likely though that this is another shake out or a healthy pullback as the market has run very hot in the past months and year. One needs to keep in mind that many institutions have purchased cryptocurrencies in this past year. The question is, are they selling, buying or holding during this dip? For one we know – Tesla has not sold its Bitcoin. At least according to Elon Musks tweets. And Michael Saylor has been using this dip to buy more Bitcoin. It will be interesting to see what the other institutions will do.
If you enjoyed reading this article, you might also want to check out What Is A Supercycle And Can We See One?
Aaron is passionate about blockchain and has been an investor in cryptocurrencies for the past years. He enjoys engaging with other people in the cryptocurrency community online, particularly on Telegram, and learning from experts.