In the crypto sphere, we’ve witnessed that the prices of top currencies started to stagnate or to slowly drop. After the crash at the beginning of the month of December, a 24-hour length spanning early Friday morning to early Saturday morning, Bitcoin’s rate went from about $57,000 to $47,000, losing $10,000, or more than 17%. Bitcoin was not the only one affected but also numerous currencies, the price of Ether dropped to $3,500, bouncing back to $4,233. Yet there was not any clear reason for the cryptocurrency drop.
The questions now are: Have we already entered the bear market? Will prices keep falling in the next months ? Or are they simply taking a breather from the typhoon to the subsequent all-time high?
But first: What Is a Bear Market?
The bear market definition comes from the stock market slang, we define a rising market as “Bull market”, and “Bear market” is when stock prices are going down.
Historically, bear markets have a tendency to be shorter than bull markets. The common duration of a bear marketplace is simply 289 days, or below 10 months, but when it comes to cryptocurrencies, the durations could vary given the highly volatile market, it’s common to have drop of more the 20% in the crypto market.
“Crypto moves at the speed of light, and 20% drops are insignificant and can happen in less than a day,” said Scott Melker.
The World Health Organization announced a new variant of COVID-19, Omicron, which has been reported in 89 countries and the number of cases is growing at a very fast rate.
The omicron variant was first determined in South Africa, Researchers are still trying to determine how much Omicron is contagious and severe.
We saw a tumble over the last few days in the stock market, but how much is related to the Omicron variant is unclear. If the variant spreads rapidly over the coming weeks or months, however, it could potentially affect the market.
The current crypto market’s capitalisation has fallen 2.8% in the last 24 hours to $2.166 trillion, a significant drop.
The undisputed leader of all currencies, Bitcoin, has been losing 2.5% in the last 24 hours and is 5.9% lower than it was exactly a week ago, Etherum as well has suffered in a drop.
Ethereum rivals Solana and Avalanche each down around 6%. Two bright spots are Ripple’s XRP, which always seems to go against the Bitcoin wave, and Terra’s Luna, both up almost 4% in the last 24 hours.
Our conclusion on the current market, is that we are probably in a bear market, we can also see that the Crypto Fear and Greed Index returned to the extreme fear territory from a score of 28 to 21. Looking back at history we can see that is a common occurrence during the end of the year. For instance during the year 2010, between September and early November we had a very bullish year considering that at the time Bitcoin was just getting small attention from the public, and a consequent drop from $0,35 to $0,17 happened, a 51.42% loss in Bitcoin’s fiat value over 30 days.