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Why did the Market Crash? Where is Crypto heading now? A complete review of the market.

With the recent crash yesterday in the “ Crypto Market “ many new investors had a heart breaking moment. There was panic everywhere in the market. Even the social media platforms went crazy. Many were Speculating that this was a suspicious move by some elite whales. All these speculations left the new entries in a void of confusion, People were not able to understand whether they should stay in the market or move out. I personally believe there is nothing to worry about regarding the certain crash. Here are my views on why the “ Crypto Market Crash “ and where it’s heading next. If we compare the current market with the market in 2017, we have come too far to be afraid of such moves and crashes.

Regulations 

We are at the verge of getting “ proper regulation in India “ and all over the world, If you will see the Indian media just covered yesterday that our govt. has started to look into the proper regulatory framework around Crypto. Even our honorable Finance Minister Mrs. Nirmala Sitharaman in an interview just shed some light a few weeks ago that they want to leave some room for testing in the space and not banning it completely. With such news there is no doubt that cryptocurrency investors in India will soon be able to trade and pay taxes without being afraid of getting into legal issues.

Why did the Market Crash ? 

There are many reasons why the market crashed. If you will go through the history of evolution of the internet, you will see that there were many critics and other rumours around it. Yet the developers and believers kept on working and developing the entire ecosystem and that is why today I am able to share my views with everyone on the internet anywhere in the world. If you will go through the market you will see many people were over leveraged thinking that the market will never go down. The funding fees for the trades were too high. There was negative news all over the market and the Mr. Elon Musk effect that created the meme season had already damaged the market. Then we had another news about China banning crypto and then a protocol got hacked due to a loophole which led to a stealing of ~4000 Bitcoin and ~9000 Ethereum tokens. All above added up together to create a negative sentiment which suddenly turned the entire market bearish and due to this the market started pushing down and when certain critical levels were broken. The stop losses and liquidations which were present there started to get executed one after another. Many loan positions got liquidated as well in different lending and borrowing protocols.

This caused a “Domino Effect” in the market and we saw the fall. As Ethereum saw a bottom of ~ $1880 and bitcoin saw a bottom of ~$29,990. These were the crucial bottoms where a majority of buy backs were placed in and there were no more bears. So the market bottomed out and started going up. This effect usually occurs in Elliot waves if you will see the below BTC- USDT chart. The current crash happened in a 3 wave pattern which followed a 5 wave upward pattern and a bearish round top. According to me the bottom was the crucial level to hold for Bitcoin so that the market can stay bullish for the current time being.

Conclusion

So as we can see the Crypto Market is a trillion dollar market now which confirms that it has matured enough to survive any of the crashes now. Every government around the world is exploring the field of blockchain and crypto to understand how it can benefit their country in the best way possible. We have a long way to go and are just getting started. Institutions getting involved will make the market more volatile in the short term but more stable in the longer time frame as the market matures from here. We definitely have a bright future. But Many of the projects which are building today might not exist in the future. This should be the main concern of new entries in the market. To stand and win in this emerging market one needs to understand and learn how value investing works. Even the short term traders need to learn to be more cautious with their money as the Crypto market has no capping and proper regulation right now. 

I hope you found what you were looking for in this post, If you’ve any other query, you can let me know in the comment section below.

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