Cryptocurrencies are in a bear market, the collapse of Terra Luna (UST) being a prominent event in which everything that led to cryptocurrencies was pointed out. While the dramatic development of the current situation has led some to advance announcing that cryptocurrencies are “finished”, cool-headed people say there are signs of a long-term recovery in the market.

For anyone who has been in the cryptocurrency space for years, this feeling can be said to be “déjà vu.” After all, the last major cryptocurrency crash was in March 2020: when Bitcoin (BTC) fell to around $6,000. But there was still a big profit opportunity for those who bought the dip at the time, especially if they could hold out until the end of 2021 and sell at $68,000. Even if you choose to sell now, you will still get 5 times the return on your initial investment.

Some prominent analysts have pointed to similarities between the current slump in cryptocurrencies and March 2020. Anthony ‘Pomp’ Pompliano, a well-known podcaster, author of “The Pomp Letter” and Bitcoin’s perpetual bull, tweeted that “Bitcoin is up 340%” since March 2020. For new cryptocurrency novice entrants, now may just be a shock they have to take before they are ready to see prices rise again (as it will be after 2020), akin to a resiliency test.

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Cryptocurrency and stock market trends

As now, in the spring of 2020, the cryptocurrency bear market was accompanied by a larger decline in the overall stock market. The decline at the time was due to concerns that supply chain disruptions and the fast-spreading Covid-19 pandemic would lead to a recession. Those concerns have led to panic selling and a slew of asset devaluations, but Bitcoin and more cryptocurrencies will continue to rally sharply, hitting new highs in just over a year. Cryptocurrencies are far from divorced from traditional financial markets and remain closely related to them, especially in the tech sector. In potentially positive news for the future of cryptocurrencies, the S&P 500 also posted a 2% gain after hitting a 52-week low, as it did in March 2020.

However, the current market situation is different from the panic caused by the epidemic. Inflation exacerbates current concerns, but whatever the reason, the fact remains: markets do move in cycles, and cryptocurrency volatility only makes price swings bigger and more dramatic.

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Cryptocurrencies as long-term investments

Terra Luna’s debacle is arguably a lesson, but two of the most popular cryptocurrencies, bitcoin and ether (ETH) still have strong fundamental data that support long-term investments. Bitcoin has a long history and is not complex and less susceptible to system failures like the one that brought UST down. Additionally, its decentralized ownership structure (the top 10 holders control only 5.59% of the tokens in circulation) protects it from market manipulation.

Ethereum, on the other hand, continues to innovate and serve as the cornerstone of emerging technologies such as DeFi and NFTs. With the upcoming “merger,” Ethereum will be upgraded to a proof-of-stake consensus model (PoS), which will make it more energy-efficient, scalable, and a more attractive platform for new projects and investors. Altcoins may “bloom and fall” in market turmoil, but the upper-level “protagonist” of cryptocurrencies will always exist.

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Join Bybit, get a bonus, trade cryptocurrencies, whether the market is up or down, you can seize the opportunity and make money.

Seasoned cryptocurrency traders know that bear markets can still offer plenty of profitable trading opportunities. For example, you can make a profit by shorting when the price falls, or buy and hold on to a dip until the next time the price rises to a new high. Some traders bought low-priced bitcoin in March 2020 and sold it in the winter of 2021-2022.

For novice traders, now may be the best time to get in and build a diversified portfolio when prices are low. Bybit is a powerful one-stop cryptocurrency platform that provides everything a novice trader needs, and users can easily operate it through our app or web version of the platform.

Bybit’s advantages include: low fees, high leverage tools, built-in wallets, and even a Bitcoin mining function, which continues to provide Bitcoin rewards to active users, regardless of market conditions, benefits as always! In addition, new Bybit users who register before May 31, 2022 can get a bonus with their first deposit.

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