The crypto market is experiencing what a lot of experts believe to be its second worst bearish overall trend in its history. Is there an end in sight?
It was about three months ago when Bitcoin got to its highest price ever, which was just a little under 65,000 dollars. But that was more of an omen that a good tiding for the crypto market.
Ever since that peak, the price of Bitcoin, for instance, has been trading with more than 54 percent decrease at around 30,000 dollars. This happened at a time when many experts predicted that the price of this cryptocurrency will continue to rise. So much so, that in fact, they thought this would finally be the year with a six figure price for BTC.
But as we know, that did not happen. If fact, far from it. We may be experiencing what we did once in 2018. A long term bear market. What happened? And how close are we to its end?
Signs of a Bear Market
There are a number of indicators for a bear market that can be analyzed to shed light on the ongoing trends in the market.
One of them is the ratio known as exchange net position change. This ratio refers to the net amount of assets coming in and out of the exchange. This index for all crypto exchange started dipping into negative figures, close to negative 8,000 dollars around the same time as the Bitcoin and consequently market price crash.
Other than the financial indicators that could come under analysis, there are other forces in play that are responsible for this declining market. Regulators.
There regulatory pressures are taking place on many different fronts, and experts do believe that they are the biggest culprit pushing the bear market forward.
For instance, China announced its tough measures against crypto mining in the country, forcing an whopping number of miners out of the network. In some cases permanently.
In the midst of this clampdown, only few miners were able to migrate out of China into somewhere that mining would be possible. Not nearly enough to compensate for the lost nodes in the network.
As a result of this measure by the Chinese government, Bitcoin’s network experienced its biggest decrease in mining difficulty, which just goes to show just how big of an effect this move has had on the market.
Banks and financial institutes also began tightening the rope around crypto-related activities. For instance, Turkey officially banned all transaction revolving around the usage of Bitcoin.
Additionally, in UK, many banks have restricted their users in their attempt to make transactions that would involve the Hong Kong-based exchange, Binance.
An End in Sight?
What can be surmised from all the evidence points toward this bear market having been done only halfway through. But is there any hope that this trend will end soon? This cannot be said with certainty.
For now, bullish forces are having their day in the sun. But there are many positive signs for the crypto market. Just this year, the record for crypto project funding was broken. So it wouldn’t be farfetched to claim that we will be witnessing a bull run for the crypto market sometime perhaps in the near future.
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