It’s been a tough few months for cryptocurrency investors. After a record-breaking 2017, prices have plummeted across the board, and there’s no end in sight. So, how long will the crypto bear market last?
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It’s been a tough few months for cryptocurrency investors. After a record-breaking run in 2017, prices have fallen sharply in 2018, with the total market value of all cryptocurrencies tumbling from over $800 billion at the start of the year to around $250 billion today.
Many have been quick to declare that the “crypto bubble” has finally burst, and that the time of decentralised digital currencies is over. But is this really the case? Let’s take a look at some of the factors that could influence the future direction of the crypto markets.
What is a Bear Market?
A bear market is a condition in which prices in a particular market, sector, or asset class fall sharply and broadly. A bear market is typically defined as a decline of 20% or more from recent highs, although some argue that a drop of 10% or more from recent highs qualifies as a bear market.
What Causes Bear Markets?
Many things can trigger a bear market, including central bank policy changes, geopolitical events, and economic data releases.
In the stock market, for example, bear markets are often precipitated by Federal Reserve rate hikes. As rates rise, bonds become more attractive relative to stocks, and money begins to flow out of equities and into bonds. This shift in capital flow can cause stock prices to fall sharply.
In the cryptocurrency markets, bear markets are often caused by investors losing confidence in the asset class or by major hacks or scams that mIREt investors’ money.
How Long Do Bear Markets Last?
The duration of bear markets varies depending on the asset class and the underlying conditions that caused the market to enter a bearish trend in the first place.
In the stock market, for example, the average bear market since 1900 has lasted about 13 months and has seen a median decline of 36%.
In contrast, the current cryptocurrency bear market began in January 2018 and has seen prices fall by more than 80% from their all-time highs. This makes it one of the longest and deepest crypto bear markets on record.
Causes of the current Bear Market
The current Bear Market in crypto is largely due to three factors:
1) The end of the ICO boom: In late 2017 and early 2018, hundreds of new projects were being launched every month and raising millions of dollars each through Initial Coin Offerings (ICOs). This created an incredible amount of hype and speculation, driving up prices to unsustainable levels.
2) Regulation: The uncertainty surrounding regulation has been one of the biggest factors weighing on the market. In particular, the U.S. Securities and Exchange Commission (SEC) has cracked down on several ICOs that it believes to be frauds, and has also issued warnings about investing in crypto.
3) Hackings: Several major exchanges have been hacked over the past year, resulting in the loss of hundreds of millions of dollars worth of tokens. This has made investors much more cautious about where they invest their money.
When will the Bear Market end?
The cryptocurrency bear market has lasted for over 400 days, and the question on everyone’s mind is when will it end?
In order to answer this question, we must first look at the historical data. The last bear market lasted for about 665 days, from 2013 to early 2015. However, this bear market was not as severe as the current one, with Bitcoin’s price only dropping by about 80%.
This time around, Bitcoin has fallen by over 80% from its all-time high of $19,783 in December 2017 to its current price of around $3,500. This is a much steeper drop and suggests that the current bear market could last for a longer time.
However, there are also some signs that the bottom might be near. For example, the number of new addresses being created on the Bitcoin network has been increasing throughout 2019, which suggests that more people are interested in buying Bitcoin even at these low prices.
Only time will tell how long this bear market will last, but it is possible that we are nearing the end.
How to survive the Bear Market
The key to surviving a bear market is to have a strategy and plan in place before the market turns. You need to know what you are going to do when the market starts going down, and more importantly, what you are going to do when it reaches rock bottom.
There are two main strategies that people use to survive a bear market:
This is the most common strategy, and it involves simply holding onto your coins and waiting for the market to recover. The problem with this strategy is that it can take a long time for the market to turn around, and in the meantime, you may miss out on other opportunities.
2) Sell Some, hold Some
This strategy involves selling some of your coins when the market starts to go down, and then holding onto the rest until the market recovers. This way, you will make some money from the coins that you sell, and you will still have some coins left when the market turns around.
In conclusion, the crypto bear market could last for quite some time. However, there are many factors that could influence the duration of the market. Only time will tell how long the bear market will last.