...By Enitan Thompson for TDPel Media.
With the cryptocurrency market experiencing a downturn, industry commentators are adopting a pessimistic outlook for the sector, with Bitcoin being the largest cryptocurrency presence seen as an indicator of its health.
Ethereum and other altcoins, including Cardano and Polygon, are down by more than 60% in 2022.
Several major crypto exchanges, including Coinbase and Gemini, have announced hiring freezes and layoffs, while shares of Coinbase have fallen 86% from their 52-week high.
The market is reportedly entering a contraction period, known as “crypto winter,” which can last for a prolonged period.
“Crypto winter” is when cryptocurrency prices contract and remain low for a significant amount of time.
Analysts believe that the onset of this period began earlier in 2022, citing macroeconomic and geopolitical turmoil as a cause.
The crypto market has decreased by 60% since November 2021, dropping from £2.5 trillion to approximately £825 billion at the time of writing.
A crypto winter, in many ways, is similar to a conventional bear market, with similar results, such as presenting an opportunity for top companies to mature and prove their products.
A steep sell-off from an all-time high in the price of Bitcoin usually marks the beginning of a crypto winter.
BTC hit a 52-week high of £57,000 in November 2021 before beginning a significant downward trend, dipping nearly 70% from November 2021 to mid-June 2022.
Ethereum, the second-largest cryptocurrency, has fallen by 74% since its November peak.
Despite the headwinds, some investors view low prices as an opportunity to buy at a discount, following the “buy the dip” strategy.
They are hoping for a crypto revival once the geopolitical and economic crises settle.
While crypto winters can be challenging, they also present opportunities for the industry to mature and prove its value to investors.
However, the market’s direction remains uncertain, with a possible spring still to come, or the potential for further contractions.
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