CryptoTrading

Has the Crypto Winter Arrived? What Does It Mean for Traders and Holders

5 Mins read
  • What is Crypto Winter?
  • When does it worth selling crypto?
  • Which best tokens and coins to HODL during such “Winter?”

In the crypto world, there is a tangible meaning of the term ‘Crypto-Winter’ that introduces a season same as winter where crypto prices become cold and frozen. So, crypto winter is a season when crypto-currencies are frozen means the crypto-currencies are not in-demand or valuable. It is the worst situation for the financial market.

Crypto Winter is an utmost matter for crypto traders and investors to be afraid of. It emerges when asset value becomes consistently still or motionless, which means its value does not rise or even fall. It just freezes totally. Generally, Crypto Winter occurs between every crypto bull cycle when the thrill of the price climbing decreases. 

As an investor, you should know clearly about the Crypto Winter, including how it happens and what a trader should do. The following section will uncover everything you should know about Crypto Winter.

What is Crypto Winter?

To simply put, during Crypto Winter, the price of different crypto-currencies has simultaneously collapsed and gives every indication of being frozen at the lowest and can dip even further. As a result, the crypto-traders also become wide awake during trading in cryptocurrency. Sometimes they end up losing interest.

Furthermore, Crypto Winter is the worst period where prices of most of the cryptocurrencies face an extreme collapse under their normal value, such as the market. And, the situation does not appear to turn back to the previous position for an extended period leading to a period of flat trading at the low price where the price barely fluctuates. Often, the Crypto Winter phenomenon happens within the long-term crypto downtrend.

Crypto Winters during 2014–2020

In 2013, October & November, cryptocurrencies increased dramatically, yet in 2016 crashed by 87%. Afterward, the prices of cryptocurrencies almost doubled in 2017, and for the second time, crashed by 84% in 2018. However, there were rumors of the potential banning of cryptocurrencies in South Korea that stimulated the freezing of the market. 

And, then it took very little to collapse the trades. In addition to that, the most prominent cryptocurrency OTC market situated in Japan was hacked, compromising Binance API keys that were misused to fulfill evil intentions.

Subsequently, Google, Twitter, and Facebook declared it illegal to post any ICO and token sales advertisement. From January 2018 to September 2018, all of the cryptocurrencies tripped over by approximately 80%, and the market couldn’t bounce back to its peak until late 2020.

When will the next Crypto Winter come?

The Crypto market has been associated with volatility, yet some expressions are more alarming than the upcoming Crypto Winter threats. The Crypto Winter is the extended period of decline in cryptocurrency prices. 

Previously, after 1.5 years or two years of the Bitcoin halving Crypto Winter has come and happened about every four years. The last halving was in May 2020 and, it was anticipated that within six months or after, a Crypto Winter might occur. Although the reward per block mined is less than before, approximately 90% of Bitcoin is in distribution by now. Consequently, the effect must have faded out over time.

Moreover, cryptocurrencies don’t need to go through a reasonably expected cycle like in the past. Yet, there is an existing common consensus that Crypto Winter may occur again due to the past few halvings. However, it needs plenty of patience to endure the downhill investment value. There are a lot of points behind the confidence that crypto is a long-term investment does not matter even if we are catching up on another Crypto Winter.

Has the Crypto Winter 2022 arrived?

Cryptocurrency is not accepted as a replacement for traditional currency, and it is a major reason for the bear situation. But things are coming to a change as we can see that it is happening in 2021 and appears to continue in 2022. 

Cryptocurrency is becoming mainstream day by day. The portfolios of companies and individual traders are consistently adopting cryptocurrency nowadays. Consequently, cryptocurrency is being recommended, and companies are allocating cash to digital assets and cryptocurrency more than before. 

The type of allocation changes that are inclined to engage momentum means the potential of more cash flow in cryptocurrencies in 2022.

When to sell crypto?

It is always hard to say when you should sell cryptocurrency. Because first, you have to look at the factors that drive crypto’s values. For example, BTC/USD has a nose dive after hitting the all-time high of $69,000 price and reached the low of September 30, 2021. 

Moreover, ETH/USD has also nose-dived after hitting the $4,870 price area and currently residing near the $3,660 price area. However, the total cryptocurrency market cap fell from $2.07 last week. The all-out market esteem contacted $3 trillion last month for an extremely short time. Furthermore, there are three important reasons behind this dive.

  • The Fed

The first dive had happened when Louis Navellier warned: “that the US Federal Reserve’s tapering could burst the Bitcoin and crypto bubble.”

  • The Covid 

The Omicron variation outbreak and the vulnerability encompassing its seriousness and the viability of vaccines.

  • December 

The Holiday Month 

So, there is a high chance that the drop may sustain further in the coming days. So, it is high time to sell cryptocurrencies or hold them for a long-term perspective.    

How to know what crypto to sell first?

As per the current situation, if we look at the technical analysis of some major cryptocurrencies we will understand when and what cryptocurrency should we sell first.  

Bitcoin

BTC daily chart
BTC daily chart

Bitcoin has broken below the bullish trend line and is currently below the $50,000 price area. Currently, the price is recovering higher and may hit the $50,000 price area again. So, if the price has a daily close below the $50,000 psychological price area, we can sell BTC by targeting the $40,000 price area.  

Ethereum 

ETH daily chart
ETH daily chart

Ethereum also broke below its bullish trend line and had a daily bearish close below it. So, if the price retests the $4,000 price area again and rejects with an impulsive bearish candle, we may sell ETH by targeting a $3,000 psychological level. 

Best coins and tokens for HODLing during Crypto Winter

Crypto Winter is the biggest reason that frightens the traders, and it is anticipated to take place in a four-year cycle since the last cycle took place in 2018. And, there is widespread consensus that from early November, the Crypto Winter has started with massive selloffs due to China’s clamping down on Bitcoin mining.

The performance of Bitcoin and Ethereum is not commendable during this Crypto Winter. Though Bitcoin and Ethereum have popularity, they are still deemed to be uncertain assets according to some experts as they are tediously exposed to high-volume trading with market exploitations on globally major exchanges. In the middle of the Crypto Winter, a promising crypto asset class named GameFi and Jetstar token amazingly have less impact.

When will the Crypto Winter end?

To conclude, the rule of the investing cycle is what is going up will eventually come down. Hence, there is always the fear of market correction. It means traders must make smart moves for the timing of their trades to sell and buy. And cryptocurrency has no difference in this manner. Crypto assets are more volatile compared to conventional assets. If the traders do not wish to lose pace, they must try thinking a few steps ahead. Therefore, when discussing potential crypto correction becomes intense, many traders focus on its new opportunities. Nowadays, traders are considering changing their trading methods rather than just leaving.

Related posts
CryptoTrading

How to Use Leverage Trading Crypto

5 Mins read
What is leverage trading crypto? How does it work? Should you use margin trading? Margin or leveraged trading is borrowing money from…
CryptoTrading

Undervalued Crypto: How to Identify It?

5 Mins read
What are undervalued coins? What are the strategies to identify them? Are they worth searching for? In the cryptocurrency realm, there are…
CryptoTrading

The Most Useful Crypto Chart Patterns for Traders & Investors

4 Mins read
What are the chart patterns? What do they tell us about the market? Is it right to rely on the information provided…

Leave a Reply

Your email address will not be published. Required fields are marked *