The cryptocurrency market has recently experienced significant fear, uncertainty, and doubt (FUD), with Bitcoin and other cryptocurrencies seeing serious price declines. News circulating on the media have reduced confidence, and market sentiment is largely fearful. Traders have been debating whether we have already transitioned into a bear market since the beginning of this month. While it is human nature to follow the crowd and differing opinions, do you believe the bull market has indeed ended and that we are now in a bear market? Before believing that the bull market has concluded, we must reconsider the phases of a downtrending market to accurately assess the situation.
A market in a decline goes through four stages.
1) Investors sentiment: At this point, investors start to wonder whether the bull market is over or if a bear market is around
2) Capitulation: capitulation is the sharp increase in selling pressure in a contracting market that signifies a mass investor surrender. Investors often give up during this stage and sell their Cryptocurrencies for a loss.
3) The third stage is where the speculators begin to enter the market. Speculators are traders with leverage and those who enter the market briefly. The market or the financial institutions that are present in the market often cause them to lose money.
4) The fourth stage is when cryptocurrency values keeps declining slowly but slowly good news starts to attract investors again, the downtrend market starts to lead to the uptrend market and possibly a bull market again.
Knowing these stages helps us to identify the side and stage of a market that is experiencing a decline. Technical evidence supports my belief that we are in the latter stages of the market's decline. If you've been trading cryptocurrencies for a long time, you would have probably observed that Bitcoin is the market leader. With the periodic alt session, the Bitcoin movement still continues to dominate the market, which provides direction for other cryptocurrencies. If you check from the chart, Bitcoin is making a strong effort to break the $88,000 support zone. Every drop that reaches the zone usually gets rejected and won't go down below the specified level. It shows that the bull market is still in charge and that it will continue to do so as long as the $88,000 level is maintained. The bull market is still holding strong until Bitcoin breaks below the support zone.
NFA(Not financial advice)
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