How to Predict a Cryptocurrency Downfall
Cryptocurrency downfall can be caused by a couple of different things. First, many rookie crypto traders were sold on the idea of profiting from cryptocurrency without having a clear understanding of how it works. As a result, they sold off their assets when the price dropped. This, in turn, led to a cryptocurrency downfall. But this phenomenon is not exclusive to cryptocurrency. It’s happening to other types of digital assets, too.
When the market begins to crash, it’s vital to time your trade. Once the market has dipped below its trendline, it will become essential to predict when it will rebound. And since prices have hit their lowest levels, the current price range may be a gift in disguise for investors. For example, ripple’s price spiked towards the end of June and has since dipped significantly. If ripple can hold up at support for an extended period of time, it will experience a double bottom formation.
Another way to predict cryptocurrency prices is by studying market psychology. Using charts and measuring the price in your local fiat is crucial. Many serious startups hold onto their Ethereum until the funds come in. While bitcoin was an impressive disruptive innovation, it has since dropped dramatically in value – hovering around $6000. And the worst part is that the cryptocurrency price will likely rise again! There is no easy way to tell which way it will trend in the near term, but there are some clues.
Despite these signs of a looming crypto bubble, it’s worth remembering that the market has a tendency to bounce back after a period of decline. This is the same reason why lending crypto trading firm Celsius Network has frozen its crypto transactions. Despite the heightened risk, the crypto bubble is likely to be smaller than the one that occurred in December 2017, with more long-term investors getting a good deal. There is still hope for the cryptocurrency market to recover.
A slew of problems can lead to a downfall for cryptocurrencies. One problem is that the number of digital coins is growing at an alarming rate. This is a problem, as the number of transactions per second is dwarfing that of the popular payment service VISA. In addition, cryptocurrencies cannot compete with players like Mastercard until they have massively scaled their infrastructure. While this evolution is complicated, some solutions can help overcome this problem. Lightning networks, sharding, and staking are solutions to this problem.
Another problem is that investors are too eager to purchase cryptocurrencies. Despite the hype, the price of bitcoin is still below USD 20000, which is INR fifteen lakh. This is nine percent less than the USD 19000 (INR 14 lakh) level in November 2020. In November, it recovered and reached USD 69000 (INR 53 lakh).