The worst week in crypto. The dip is getting lower.
I got up this morning and do my early morning glance at the crypto market (on coinmarketcap )only to be shocked that bitcoin dipped below 30k for the
first time in a long time. looking at the rest of the coins it's all bleak, the entire market is experiencing one of the worst runs ever since I have been in crypto for almost a year. Every coin I bought is either half the price or a third of my initial buy-in. It's kinda funny in a way because as soon as you buy in, the market decides to test your nerves and dips haha. but seriously people are losing money and if they sell that's a loss.
Me in not selling just yet, am I freaking out, not really, at least not yet. should you be freaking out, everyone is different, what strategy works for someone else may not work for you. if you day-trade low cap coins then you might be freaking out now or on the flip side elated. Every coin is extremely cheap now is the best time to buy them now and wait for the surge again. it going to happen
I am in crypto for a long haul so I don't buy low-cap altcoins that can crash and never recover. the only time I sell my positions is in the event that crypto is gone for good and the entire market is gone. At that point my entire portfolio is worthless. I'll start freaking out when bitcoin dips around 10k.
Trying to figure out why the crash is happening will save you from overreacting.
Extreme fear in the market. famous investing quote, "sell when others are greedy, buy when others are fearful.
fear among the average crypto investor is high, and so they sell even at great losses
Try to understand what is happening before you start overreacting and selling all your crypto coins. Right now I whats the originator of this dip is terra Luna and stable coins pegged to US dollar. at least that is what all the crypto YouTubers have been saying. unfortunately, I don't understand the technical aspects of this to explain to you guys. I am trying to understand myself.
From what I understand this has to do with the de-pegging of terraUST from the US dollar. as seen in the chart below, it is supposed to be stable, flatline, dead, and not volatile, because it's pegged 1:1 to the US dollar. stable coins are redeemable for the same amount of US dollars. Current stable coins are all pegged to the US dollar because it is the world's reserve currency.
The top stable coins are all closed to 1 dollar, while terra USD is at this moment hovering around 0.6 dollars, not good at the moment
since it is de- pegged from the US dollar, I heard that the company Terra luna is selling their bitcoin reserves to try to get back the USD to 1 dollar. The financial mechanics of how this work is not something I am knowledgeable about, but I know that if a large whale starts selling its position in bitcoin it would cause prices of said cryptocurrency to drop drastically and then cause a downward spiral to happen .and as we see it's dropping. Coupled with outside world economics like 40-year high inflation, stock market going down, the war in Ukraine, and other news all have been causing this dip.
Since the overall market is crashing you might be tempted to think that crypto is done for good , but if you understand why it is crashing you could see that many smart people are still bullish on the overall crypto market and a lot of people would be buying the dip.
I know this is not detailed enough, it's lacking in more detailed information, but if anybody can comment more detailed point down below that would be great. can you explain more in-depth why the market is tumbling?