Yahoo Finance Has the crypto crash bottomed out?
Bitcoin and cryptocurrency prices have crashed over the past week with around $1.4 trillion wiped from the combined crypto market, sparking warnings of a "crypto winter".
The Bitcoin price dropped below US$33,000 last week, down more than 50 per cent from its November peak.
Ethereum, the second-largest cryptocurrency by value, has crashed to US$2,300 per coin, down from almost US$5,000 late last year.
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Cryptocurrency prices have been declining since November, with investors subsequently going on a selling spree that is causing prices to plummet even further. Since Sunday, about US$130 billion has vanished from the cryptocurrency market.
Bitcoin was at about US$35,000 on Monday morning, down roughly 50 per cent from a record-breaking US$69,000 in November, while Ether was at about US$2,400, also down roughly 50 per cent from a US$4,670 high. Both coins have since bounced back by the end of yesterday.
The Shiba Inu coin declined by 78 per cent.
However, most experts agree the crash hasn't come to an end yet.
"I believe that the market has not bottomed out and there is more downside to come," Vincent Choy, chief development officer at OZ Finance, told Yahoo Finance.
"Historically, over the past five years, cryptocurrency prices have always sustained falls in the lead-up to Chinese New Year and that trend has been unbroken since 2016.
"However, that being said, the influence of China in cryptocurrency markets has fallen significantly given the sustained efforts by the regulators to reduce its availability to Chinese citizens, so maybe this year would be different," Choy continued.
How low can crypto go?
"We've seen a sense of relief across the digital currency ecosystem as Bitcoin, Ethereum, Cardano, Solana, Chromia and other coins recover some of their recent losses," Mattias Tengblad, founder and CEO at Corite CO told Yahoo Finance.
"While the recovery may look promising, it's important to note that we are not out of the woods yet. Until BTC maintains very strong support above US$40,000, the chances of a downturn are still high.
"With many fidgeting sellers still around, Bitcoin’s correction is poised to bottom out at the US$30,000 level, while Ethereum’s major support level in this bear market is pegged at US$2,100.
"Cardano and Solana could also bottom out at US$0.80 and US$80 respectively."
'Tread carefully'
Tengblad said these were the crucial bearish levels to watch out for.
"But a surprise steady growth is also possible going forward as the broader stock market gets more closure on the Fed’s approach to the current scare over its planned interest rate hikes," he said.
"Investors would be well advised to tread carefully over the coming weeks."
The bottom line.
Whether you decide to sell your crypto or see this crash ... as an opportunity to buy more, it's important to act with a cool head.
Making emotional decisions, especially when trading, rarely results in anything good happening.
So, before rushing into the market in a panic, reflect on why you’re trading crypto in the first place.
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