Could cryptocurrencies hit bottom and not rise again? |

The last few days may be the hardest for cryptocurrencies in recent years. Overall, equities have fallen, the bond market has plunged to its lowest level in almost 9 years, and risks have risen. All of this has a lot to do with the pandemic caused by covid-19 in early 2020 and the fact that the global economy has not yet recovered from such a severe blow.

To this situation we must add the last war, which was a milestone in world history, but also in the economy as usual. The war between Russia and Ukraine has generated various movements in the cryptocurrency market since its inception. From that point on, the major cryptocurrencies began to have more points below the regular average, and what some consider to be the beginning of the end for cryptocurrencies began to take shape.

The uncertainty created by the economic situation around the world has led investors to make important decisions, and one of them has been to reduce their investments in risky assets, as cryptocurrencies clearly are. This means that the speculative, bullish enthusiasm that characterized bitcoin and other cryptocurrencies since at least the mid to late 2020s has almost disappeared.

And if such a fall was predictable, it would surprise many people. A few months ago, the speculative madness in the cryptocurrency market was at its peak, only on November 10 did bitcoin reach a new record high after a major drop following China’s ban on mining and mining the use of cryptocurrencies.

Towards the end of last year, there were some signs that 2022 could be a good year for cryptocurrencies, but others considered it unlikely. Several analysts claimed that there was a major downturn ahead for the market, and at the beginning of the year, the fall in prices of major cryptocurrencies began to be felt, and although at times there was some stability, this situation has changed drastically. and the preceding peaks are more and more distant.

Cryptocurrencies are not immune to inflation

Although it may seem that cryptocurrencies are quite far from the traditional economic structure and its mode of operation, we sometimes notice certain similarities, and among them the fact that cryptocurrencies do not escape inflation. While this can sometimes be beneficial for cryptocurrencies, there will come a time when the trend may reverse and affect the market.

Currently, the market is in a rather difficult environment, wars, general inflation, recessions and monitoring of regulators have created the perfect blend for the decline in the overall value of the market. In a few hours, very sharp declines were recorded, resulting in significant losses for a large number of investors.

And while many market participants expected rising inflation to work in favor of cryptocurrencies, the situation turned out to be different. In the case of the United States, which is the largest cryptocurrency market in the world in terms of transactions, participation and mining, it has experienced a record high level of inflation that has not been seen for more than 40 years.

In the first quarter of the year, US GDP fell by 1.4%, leaving the country’s most important investment destination in one of the most complex times in its economy. This is why we detect sudden changes in the level of cryptocurrencies, and if we add what happened to Luna and Terra, it ends up being the most dangerous and safest combination for a failure, at least and in the short term.

And as usual, there is always hope for growth in the market, but it is unclear what will happen. No one can predict the decline or rise of bitcoin at any given time, it is left to wait and see how investors react in the midst of the crisis.

Some analysts believe that the market will experience much more difficult days, but that by the end of the year it will start to rise again. At the moment we are not talking about the next heights because it is a distant view, but the possibility of a recovery is not ruled out and at best the market will see good days again if the good gestures are made.

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