Crypto Market Correction: Is It the Right Time to Buy?

Crypto Market Correction: Is It the Right Time to Buy?

If red is your favorite color, you should definitely look at the cryptocurrency market right now. It has crashed for the second time this year. If not, you should take a look. It is well known that one man’s dirt can be another man’s treasure. This is exactly what the current correction in the cryptocurrency market reflects. This is not investment advice for entering the cryptocurrency space, but for your consideration, now is the time to buy the downside and profit from the cryptocurrency market correction! This is not investment advice.

Why Did Crypto Market Turn Red Recently?

This is hardly the first correction in the cryptocurrency market. Bitcoin was the original cryptocurrency that emerged in the wake of the 2008 global financial crisis, but it did not have a great start. Within a decade, however, the price soared to a huge level of nearly $20,000, an all-time high for the time. The turning point came the following year, when the currency was devalued by 75 percent. Investors were thrown into turmoil and critics praised the currency.

However, it turned out to be nothing more than a market cycle. Bitcoin has come back stronger than ever. In a financial market, there is no linear path. Over the next few years, several other cryptocurrencies emerged and performed exceptionally well, with Bitcoin leading the way. in November 2021 it reached a new all-time high, only to return to 2017 levels. Bitcoin reached $68,000 in November 2021. This year it suffered a blow when it fell below $18,000. This phenomenon has not been limited to Bitcoin, as major cryptocurrency systems have lost more than 70 percent of their value this year.

However, the reason for this decline or correction is different. In May, Terra Luna, considered one of the top 10 cryptocurrency systems in the world, actually collapsed into the dust, losing 99 percent of its market value. It held its value at $120 last year, and with the collapse it almost went back into the dust, with $40 billion in market value disappearing without a trace.

This was enough to make investors lose their exuberance and add fuel to the fire by blocking withdrawals and transfers from cryptocurrency exchanges.

Added to this is the current difficult situation in world markets. Many macroeconomic factors have played their part. These include.

  • Russia v/s Ukraine tension
  • Higher inflation and a potential recession awaiting
  • A rise in the Fed rate and,
  • A curb in expenses leading investors to read between the lines.Recent regulatory uncertainty in countries such as China, Russia and India has also created fear, uncertainty and doubt (FUD) in the market.

    The combination of these reasons has led to a sharp market correction this year, with the overall valuation of the cryptocurrency market falling below the $1 trillion mark since last January.

    Is It the Right Time to Enter the Market?

    A famous quote by Ken Fisher reads, “Time in the market trumps market timing.” This means that time spent to stay invested is more valuable than time spent to enter the market. Any asset invested for the long term can generate the same level of return. However, it is not without risks and limitations.

    The cryptocurrency market is currently at an all-time low, which raises the question: is it worth buying a falling stock? The answer is “yes” and “no,” or more, depending on your preference. If you invest in a cryptocurrency market correction in 2018, your investment will undoubtedly have tripled in the past year, but will return to 2017 levels only a few months later.

    The falling market is a concept related to the cost of managing the midpoint of the U.S. dollar. It refers to the regular purchase of an asset to take advantage of market volatility and reduce the total cost of purchase by averaging prices. This works well in the stock market, but cryptocurrencies are more volatile than stocks. The reason is that the cryptocurrency market is open 24/7.

    So while a drop may be a good time to invest and take advantage of low prices, the real right time to enter the world of cryptocurrencies is when you are truly ready to invest and embrace the upside potential while the downside looms over your head. If you think you are, download Mudrex!

    Will the Crypto Rise Again?

    The decline of the cryptocurrency market can be described in two ways. It is either a slump or a correction. The meaning remains the same, but the intent changes. The first breakout is fear, the second is opportunity.

    Cryptocurrency Price in July 2017 Price in November 2021 Price in July 2022
    Bitcoin 2718.62 57834.36 19407.45
    Ethereum 194.97 4426.74 1040.8
    Litecoin 43.26 206.67 50.36

    Source: Statista

    As the table shows, cryptocurrencies have their ups and downs, but they certainly require due diligence before investing. Currently, the cryptocurrency fear and greed index stands at the level of 9/100, indicating that investors are extremely scared. It was 75/100 when cryptocurrencies hit an all-time high last November.

    As its track record suggests, the upside potential is there, but given the current state of the cryptocurrency market and the macroeconomy, it may take its time. It is best to assess one’s risk appetite and do thorough research before entering the market at any time.

    Conclusion: What’s In It For You?

    As investors, you can take advantage of this correction by investing in cryptocurrencies, but it can be a bit risky. This decline is a great opportunity if you have the necessary risk appetite, but it has its advantages and disadvantages. In addition, investing in individual cryptocurrencies can be difficult.

    For example, if you invested in PancakeSwap (CAKE) a few months ago, your capital may have dropped by more than 50 percent. However, if you had invested the same amount in the entire diversified swaps sector, you would have had a net gain. In a bear market, the investment sector is a prudent form of investment. Mudrex Coin Sets allows you to invest in different sectors with just 2 clicks and no fees.

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