With the way the market is performing, people wonder if there will be a situation whereby the prices will go down by nearly 90%, the market will crash, and the bear market will begin. Something similar happened in 2018/2019, Bitcoin went down by 87%, Ethereum went down by 99-99.9%. Many of the survivors of the 2017-2019 bear markets still have PTSD when thinking about where the market will be during the next bear market cycle. Many people believe that we are entering a bear market cycle, but we may not be. Most indicators that we use to determine where the market might indicate that we are not in a new bear market; we are in a bear trend within a bull market.
A new bear market will come eventually but not yet; it is understandable because, at some point, the market has to adjust. The cryptocurrency market, on the other hand, is extremely volatile.
There are several reasons why regardless of the bear market beginning, it may not be as bad as the one we saw back in 2018. The markets have been crazy for a while now; we have seen meme coins that do nothing launch and go up into millions of dollars in a very quick amount of time; many investors are only coming in and gambling their way in the market. We have also seen a rise in new Ponzi schemes.
You have to keep in mind that cryptocurrency is not like stocks if you are a new retail investor entering the market. You do not have any rights with a lot of these coins and tokens in the same way you would have with stocks; you are not getting shares. In 2017, there were no working products, but now, we have real technology and real users flooding into the market. This is one reason why a bear market should begin; it may not be as bad as the past ones we have experienced. The products and applications keep getting better, and the liquidity keeps getting deeper. The cryptocurrency market has advanced when compared to the 2017/2018 market.
Another reason why a 90% bear market is less likely to occur is big money entering the market. Throughout last year to the start of this year, we were getting news concerning big companies, hedge funds, private funds, and so on getting into the cryptocurrency market. The big money guys are why we may not have an awful bear market where we will see a 90% fall in the prices. The big money guys, the whales, invest huge money into the cryptocurrency market to buy Bitcoin as a long-term asset. We can now say that there is a problem when they begin to sell their crypto one after another.
Yes, you have every right to panic, it is your money, but you should also bear in mind that the market cannot avoid a major correction; it is natural and bound to happen. But it will not be as bad as the past ones.
