We’re definitely in the middle of a crypto winter these days, and according to more expert voices, this will last a little longer. While a lot of people are freaking out, long-term hodlers who have been through similar events a while ago are not that worried.
Check one some interesting reports about the crypto winter in 2022.
2018 vs 2022 crypto winter
Crypto is closer to the bottom than other assets, CoinMarketCap’s head of research said not too long ago,
Alice Liu pointed to the fact that Bitcoin has dropped in price 30% in the past week alone — with Terra’s collapse and Celsius Network’s financial woes piling pressure onto the crypto ecosystem of late.
Here’s what she had to say:
“All these events have already allowed it to price in a high degree of negative sentiment within the crypto market.”
According to the notes presented by CMC, the total market cap of all cryptos has shed $379 billion in the past month — and that’s a decline of 28%.
Liu also pointed to how the Crypto Fear and Greed Index has dropped to 7 this week — indicating there’s “Extreme Fear” among investors.
It’s important to note the fact that this is the lowest level we’ve seen since March 2020, when the World Health Organization declared that coronavirus was a pandemic.
She also made sure to point out that this crypto winter is different from the one that was witnessed back in 2018, when BTC plunged by more than 80% in over a year.
“For the first time crypto is going into a bear market when the global markets are also expected to go into a negative outlook… When the global economic outlook isn’t bright, it amplifies the fear in crypto.”
This crypto winter hurts digital assets in two ways
The analyst explained that this “hurts crypto in two ways.”
“Firstly, investors are more likely to sell and crystallize losses when they believe the market will fall further, undermining the HODLer mentality. Secondly, there is less willingness to ‘buy the dip’ at current levels when the price is expected to fall further.”
Check out the complete notes in order to learn more details about all this.