The crypto market looks bullish these days! But does it mean that the bearish trend is over and we are at the beginning of a new bullish cycle? In this post, I want to share with you the TOP 3 reasons that will be able not only to change the bullish sentiment but also to dump the market to new lows.
REASON 1: Regulation We are not far from CBDC and I don't believe that Europe, the USA, and other developed countries will release CBDC without regulation of the whole crypto market. Also, another argument for the regulation, is too much scam!
The crypto market increased the capitalisation.The crypto became part of the financial world. So, the regulation is a logical step forward. I bet this year regulators from different countries will try to take the crypto market under their control. If so, it will be a bearish factor for the market.
Of course, everything will depend on the exact format of the regulation. But anyway, it may create a strong bearish pressure. So, we have to consider such risk in planning our long-term trades.
REASON 2: Scam & Bankruptcy In 2022 we had many ways to blow our money. Even if you followed the rules of proper risk and money management, it wouldn't defend you from shitty situations. For example, staking UST was an amazing idea. Just around 20% for doing nothing, in the bearish market... why not? You staked the stablecoin one of the top projects in the crypto space! Smart? Yes, sure! And... you know the result.
FTX, the 2nd crypto exchange offered you very interesting terms for trading. It was absolutely logical for many retail traders to hold their crypto assets using FTX accounts. FTX was a very reliable crypto exchange with good potential. And? You know the result.
And there were other companies and coins which could help you to stay without money.
Who told you that in 2023 we will avoid such situations? Scam and bankruptcy stay one of the main reasons for the great dump! Just imagine, what if Binance cheats their clients??? Where will be Bitcoin after such news? Around $1 000??? What if Coinbase goes bankrupt??? Possible? Absolutely yes! After FTX everything is possible.
I talk about the top companies in the industry, but there are many other companies with lower status that will be able to dump the crypto market as well.
Again, we have to consider this risk in planning our trades.
REASON 3: Manipulation The crypto market is a manipulated market. It's a well-know fact. We have to be ready to see manipulated movements where manipulators execute their plan. Is it possible? Why not! Just remind you, big players have enough resources to push the price in any direction they want.
You could take part in the pump, but who started it? Many retail traders blew their accounts shorting crypto assets. Did they have reasons to open short positions? Yes. They had fundamental reasons to expect the continuation of the bearish trend. But the volume created by their short positions was used to pump the price to local highs. Why not to do the same for dumping the market?
Manipulators don't have a goal to make your rich. But they have a goal to take your money and reach their goals. And I think, one day when there will be enough "bullish" volume created by long positions, manipulators may dump the price and update the lows.
They took money of those who shorted. They will have an opportunity to take money of those who believe in new ATHs and "to the Moon!".
In order to create panic sales with the further margin calls in the market full of bullish sentiment and long positions, they just need bearish news and a short position with good volume opened by market prices.
I consider these 3 reasons in planning my long-term trades. Of course, maybe non of them will be activated in this year, but it will be just a nice bonus. And what do you think about reasons that may dump the crypto market in 2023? Share your thoughts, please.
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If you think that the price reached the bottom and the bullish trend began, please, share your arguments. It will be great to discuss.
D you are totally correct man. I have been saying it for a while. Trading in these waters using the old trading techniques and old forms of market analysis is the same as driving around with a 1975 map uploaded in your GPS. The big players know what map you are using and they know what you're expecting. That's all they really need to clean you out like a Vegas casino. Aside from the reasons you mention, I would also mention the stock market in general. We know the US gov is trying to ignite a recession, because inflation is out of control, thanks to their QE approach. Once this recession kicks in, the stock market will dump and so will crypto. Oh it's def coming too. The US gov already stated this as a fact. The plan to continue raising the rates, and we know what comes next...
DLavrov
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@cryptospawn, Interesting point! Thanks a lot for your comment!
Thank you for sharing your thoughts and assumptions but I mostly disagree with you.
1. Regulation: I dont think regulation is a bad thing, rather its a good thing since many people who are afraid to enter the crypto industry due to lack of regulation which allows for scams and manipulations to occur. So if we have regulations come in this year, I think its very bullish news. Lots of retail will gain confidence in the markets and start investing and potentially taking crypto capitalisation to much higher valuations.
2. Scam & Bankruptcy: I think 2022 was the tipping point for most of the bad actors to fall out. We saw a few big black swan events which resulted in big losses for both users and the partners of those companies. Could there be more? Yes sure, could there be less? Yes sure. The worst hit would be if Binance turns out the same way but I highly doubt it. So anything other than Binance is not going to have a big effect I think. Plus, we have seen the crypto market recover from many situations like this in the past. The technology itself is very strong, we have just been getting rid of the bad apples. So now we can have a healthier market moving forward. Especially if we get some regulations, this would be happening less and less.
3.Manipulation: This is the one that I sort of agree with you but it contradicts with the first point, so if we get regulations, I am not so worried about this. And even if we dont get regulation any time soon, we could still see crypto staying in bullish market for this year at least cause of all the upside potential that these manipulators may want to milk before dumping.
DLavrov
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@AltugOzturk, It's a very interesting point of view! Thanks a lot for sharing your thoughts!
@TheKitchenTrader, 9k is a not a buy if it comes. Fundamentally it can't come, breaking 13.7k with a closed candles of weeks or monthly will lead to much lower prices than 9 or 10 or all these other false hope predictions. It would lead to much lower prices at like 2k to 3k and would take many years to recover from. So, be careful what you wish for. Also, for the health of market from what I know, any closes under 13k are devastating and can not come. Having said all that, it doesn't mean we can't get another strong pull back (correction) at some point.