Crypto markets are seeing a positive trend, with Bitcoin (BTC 5.95%) and Ethereum (ETH 5.51%) prices soaring. Many people are happy to see positive momentum in the market, after facing a long crypto winter.
With a bear market long in place and the famous volatility of crypto markets, some are skeptical that this comeback will last. Known for its volatility, the crypto sector has proven that it can crash just as quickly as it can climb.
Are you considering buying stocks in the market right now? While it is a popular move to make as prices continue to rise, it’s only an investment that can be deemed safe if you are using a broker who is regulated by the SEC and has extensive background checks and screenings, including quality control checks.
It is important to understand that, while many top cryptocurrencies have fallen 70 percent or more from their all-time highs in November 2021, the crypto market is cyclical, meaning that it usually bounces back after a low. It is not uncommon for cryptocurrencies to bounce back after a crash and achieve new highs.
Crypto projects, traders, and investors have suffered a lot due to the current bear market. Several top cryptocurrencies have fallen more than 70 percent since their all-time high in November 2021. The result has been that countless individuals have lost their entire savings, and many crypto companies have collapsed. There is, however, hope at the end of the tunnel.
There is a cyclical nature to the crypto market. Thus, it usually rebounded after a low. Following a crash, cryptocurrencies usually bounce back stronger and reach new highs. The current state of the market makes this difficult to imagine. Experts believe this pattern will repeat itself in the months ahead, as it has in the past. Follow along as we look back at three crypto market crashes that led to new highs.
In 2011, there was the first crypto bear market
Bitcoin crashed from $32 to $2 from July 2011 to January 2012, when most people weren’t even aware of cryptocurrencies. The stock has fallen 93 percent in a few months. By 2013, prices had rallied once again and had surpassed the previous ATH.
From 2014 to 2016, there was a bear market
A few years later, toward the end of 2013, we experienced the next bear market. BTC’s price plummeted from $1,135 in December 2013 to $175 in January 2015. Several factors contributed to the sell-off, including Mt Gox’s announcement that it had been hacked, with the attackers escaping with 850,000 Bitcoins. With today’s rates, that’s a loss of nearly $17 billion, making it the largest crypto hack ever.
As a result of the hack, the crypto market lost nearly 85 percent of its value. By August 2015, the price of BTC had begun to rise again, tracing its steps back to $1,000 by January 2017, before reaching a new high of $1,200 by April 2017.
The bear market of 2018 and its incredible turnaround
In December 2018, the price of BTC dropped from $19,640 to $3,185. Several factors contributed to the decline, including an attack on Coincheck, one of Japan’s largest crypto exchanges, and the SEC’s rejection of Bitcoin-based exchange-traded funds. During those 12 months, BTC dropped nearly 84 percent due to these factors.
Luckily, BTC’s price recovered to $20,000 by July 2020 before reaching its current all-time high of $69,000 in November 2021, just like the other two crashes.
In the current crypto bear market
BTC is currently trading at $20,228; the global crypto market cap is $958 billion, a result of the current bear market that has lasted several months. In 2021, it reached an all-time high of $2.9 billion.
A number of experts, including the CEO and co-founder of Binance, Changpeng Zhao, have said that the bear market will be beneficial to the crypto industry in the long run. These market corrections are also believed by many investors and traders to weed out all the dubious crypto projects. Additionally, they are a great opportunity for market participants to buy cryptos at a low price while prices are low.
Moreover, this is the last week of September, which has been one of the worst months for cryptocurrencies over the past six years. BTC’s price has fallen six times in the last eight Septembers. The month has even been nicknamed “Shocktember” by many investors. Fortunately, October is a relatively good month for crypto, with prices usually turning around at this point of the year and beginning to rise. October is known as Uptober because of it.
Conclusion
Even though the crypto market is highly volatile, it appears to follow a cycle of ups and downs. The current bear market should be followed by a strong bull market based on this logic. In the coming months and years, new highs may be in store if historical data is to be believed.
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