Where is the crypto market headed after the 2022 crash?

The Twittersphere is going wild about the state of the crypto market. With fear, uncertainty and doubt (FUD) in play, one of the biggest questions going through everyone’s mind right now is what will happen to the crypto market?

What happened to the crypto market?

Cryptocurrency prices have been falling month after month, prompting some experts to refer to the situation as a crypto winter. With Bitcoin down more than 50% from its all-time high (ATH), other major cryptocurrencies are following suit.

As a result, a growing number of newly introduced investors are bowing to FUD, unsure if there is any chance of cryptocurrency survival. But for some long-term HODLers, this kind of volatility is actually quite normal and has long been expected in the market as a result of astronomical highs.

Although the market has been in a bearish trend for some time, one specific event had a significant impact on the crypto market as a whole. Due to the decline, the “Terra-LUNA crash” caused investors to reevaluate their holdings because it suggested that not all cryptocurrencies would be safe.

How did the ‘Terra-LUNA’ incident affect the crypto market?

Since LUNA was one of the top 10 cryptocurrencies, it raised an alarm especially for crypto investors who like to invest money in other projects apart from Bitcoin and Ethereum which are considered by some experts as two of the most reliable cryptocurrencies. Since the top two cryptocurrencies themselves fell dramatically in price, this painted a rather scary picture for some of the investors.

For investors who started buying crypto when it was at its peak, seeing how much the market has fallen can be an alarming sight. This is especially true for those who bought at the peak of the bullish season.

After Terra LUNA crashinvestors are now starting to look past the hype and look at the coin’s tokenomics, to see if a project is truly safe or not.

What’s happening on Twitter?

The topic of which cryptos to avoid and why is trending on Twitter. Analysts are now collecting information on everything related to cryptocurrency, including whether specific cryptocurrencies are safe to invest in.

Another big fuss is circulating about how Elon Musk is being sued over what happened to Dogecoin with a lawsuit calling the arrangement a “pyramid scheme.” These are just some of the events that have put fear into many of the newer investors.

Also read: All about Dogechain the Layer 2 Network

How do crypto traders make money in the market?

Traders use certain crypto exchanges that allow them to execute long or short market positions. A long position allows them to make money when crypto goes up and a short position allows them to make money when crypto goes down. This way, no matter where the market moves, they are still able to profit from the volatility.

They have many choices regarding which company to do business with. Some big names in the crypto space include exchanges like Coinbase and Bitcoin profitwhich also doubles up as a brokerage house.

Why Aren’t Older Crypto Investors Concerned?

As for older seasoned investors, volatility in the crypto market is somewhat expected, and while they may be a little down, they have been in crypto far too long to know that this could just be another bear market cycle. Other investors say now is a perfect time to buy more crypto since today’s prices are considered discounts to the entire market.

Also read: 10 Tips for Surviving the Crypto Bear Market

Market volatility is something that all markets experience, whether in stocks, foreign exchanges, commodities, cryptocurrencies or others. However, one thing that scares many new investors is how drastic the changes are when it comes to the crypto market.

But since they profit from volatility anyway, long-term investors and holders of long positions (HODLers) don’t care if an asset experiences ups or downs. On the other hand, traders believe that because asset prices fluctuate, it may be a good idea to buy now before they rise.

Conclusion

If you only invest money you can afford to lose, you can profit from the cryptocurrency market whether you are a long-term hodler or a short-term investor. Due to market volatility, it is critical to speak with a financial advisor first to ensure that your investment will not impact your overall financial capabilities.