• This bear market could last up to 9 months.
• Stablecoins are going through a tough time.
• Although it is impossible to predict the bottom, a rebound might occur soon.

All cryptocurrencies continue to be affected by the ongoing bear market in 2022, which includes non-fungible tokens and decentralized finance markets (DeFi). Many attribute the crypto winter to the ongoing months-long conflict between Russia and Ukraine, as well as the US Federal Treasury’s newly-imposed interest rate hikes.

The crypto market would have been remiss if they didn’t consider the TerraUSD (UST), and (LUNA (LUNA) tragedies and their impact on larger markets. Technical analysis-wise, Bitcoin’s weakening market sentiment has lost the confidence of many regarding its claim of becoming a better hedge against inflation and volatility.

What are some possible scenarios for the future of crypto? Do you think it is time to get out of the crypto market or should we continue to invest in the markets without knowing the price?

One Year of Minimum Bear Market

While many factors are uncertain right now, there’s one certainty: the bear markets could continue for at least one year.

Chart 1 day BTC/USDT from 2018-2021

Today’s crypto winter is reminiscent of the 2018-2019 bear market, where and major cryptocurrencies tanked after a euphoric run in late 2017. This bear market has proven to be one of the best because it lasted so long and had such an impact on crypto as a whole.

Binance (a cryptocurrency) was a brand new startup at this point. However, it did have a successful initial coin offer (ICO). The world was also just beginning to realize that cryptocurrency wasn’t just a buzzword.

The value of a portfolio that was bought at the top saw its worth drop to $3,000 per BTC by those who purchased it. The bear market of 2018-2019 was violent and deadly.

The current crypto winter may have many differences to the last one but there are reasons for people to think that sentiments are the same. Bitcoin has now fallen to $30,000. They are currently at $1,900, $260, respectively. These prices are not seen since July 2021.

Meanwhile, LUNA may have met its demise, as it is worth $0.05 at the time of writing – practically worthless now compared to its ATH of $119 just one month ago.

The current market situation makes it difficult for bull runs to be found in the coming months. The market will need to recover its footing within 9 to 12 months.

Stablecoins Under a Crucible

Stablecoins also are suffering massive losses. The UST price today is less than $.50. There are many theories as to why this happens. UST can also be described as an algorithmic stabilitycoin. This means it does not have any real-world assets backing it.

Asset-backed stablecoins also are subject to the market turmoil. The (USDT), in particular, fell to $0.98. This is unusual. Tether was able to tap a third-party to execute a chain swap between Tron TRC-20 and Ethereum ERC-20, for 1 billion USDT, or Tron TRC-20 and ARC-20 for 20 millions USDT.

This chain swap was used to offset the USDT tokens that were minted across various blockchain networks. Tether’s transaction volume has reached $175 billion in the past 24 hours.

Although stablecoins such as Circle USD (USDC), and Binance USD(BUSD) seem stable, it is clear that this crypto asset type is still under tremendous pressure from intense capitulation. Stablecoins will need to wait longer before things stabilize again.

It is difficult to predict the bottom

Most cryptocurrencies are on sale at huge discounts right now. However, it’s difficult to know how much lower the market will fall. Many would feel tempted to buy leading altcoins such as ADA, DOT and AVAX.

Traders and investors need to exercise caution, however, since there’s no telling what the bottom will be. Many people are familiar with market cycles and would say that the majority of cryptocurrencies are currently in the distribution phase. This is where people attempt to get out of their positions and cause a continual sell-off.

For those just starting to invest in crypto currencies, this current state is uncharted territory. For anyone looking to make a better investment strategy it would be beneficial to look at both the technical and fundamental aspects of cryptocurrency.

It’s possible for a Bounce to occur soon

On a positive note, there’s a possibility of a bounce in a week or two. Traders looking to make quick profits may be able to anticipate the bounce, and still reap juicy rewards in a market that is undergoing a slump.

BTC/USDT 1 week chart (source: TradingView).

Bitcoin’s recent 5-point movements can be seen in the graph. In addition, there’s a possibility of another 3-point movement soon, in which Point A has been identified already.

Markets can be expected to correct up to $55,000 if there is enough selling pressure. It is unlikely that this upward rebound will last. There’s a higher chance to make another descent should the market fail to retake previous support levels.

Disclaimer: The views and opinions expressed in this article are solely the author’s and do not necessarily reflect the views of CoinQuora. The information contained in this article shouldn’t be taken as advice. CoinQuora urges users to conduct their own research prior to investing in cryptocurrency.

Continue reading on CoinQuora