Why is the crypto market "red" and which coins should you keep an eye on?
Why is the market falling?
Recently, many investors have observed a sharp decline in the crypto market, leading to losses. There are several key factors that cause this situation:
1. Geopolitical tension and economic uncertainty. Global conflicts and economic crises often have a negative impact on markets, as investors fear risks and prefer safe assets.
2. Regulatory changes. Governments in many countries, including the US and the European Union, are increasing their oversight of the crypto industry. Tax increases, bans on anonymity, control over exchanges - all this causes panic among investors who consider cryptocurrency the basis of financial freedom.
3. Behavior of large investors and sales. "Whales" can manipulate the market, causing sharp fluctuations in prices. When large investors decide to sell large volumes, it causes others to also sell off assets due to fear of losses.
4. Psychology and emotions. Panic moods often aggravate the fall. A red market forces many newbies to sell their assets even if they have fallen slightly in price, reinforcing the overall downtrend.
Is it worth investing now, and what should you pay attention to?
Despite the market decline, experienced investors use such moments to find promising assets with growth potential. Here are some cryptocurrencies that may be of interest to your portfolio:
1. Bitcoin (BTC). Bitcoin is the “digital gold” of the crypto market and is often invested in during times of crisis as a stable asset. Its limited quantity and high liquidity make it an attractive long-term investment.
2. Ethereum (ETH). Ethereum, which has the second largest capitalization, is constantly developing. Its move to PoS and support for smart contracts make it attractive to developers and investors. In bearish conditions, ETH is often more stable compared to other altcoins.
3. Polygon (MATIC). This platform solves Ethereum's scalability issues by offering faster transactions with lower fees. In the future, MATIC may become an attractive option for investors, especially if the demand for blockchain solutions grows.
4. Chainlink (LINK). Chainlink provides access to external data for smart contracts. Given the prospects of DeFi and Web3 usage, LINK can play an important role in the crypto ecosystem.
5. Cosmos (ATOM). This is a network that allows different blockchains to interact with each other, that is, it is aimed at creating an "internet of blockchains". Given the growing demand for inter-blockchain interactions, ATOM has the potential to grow.
How to behave during a market downturn?
1. Make long-term investments. If your investments have a long-term perspective, temporary market fluctuations should not scare you.
2. Consider dollar averaging. This means regular investments of a fixed amount. So you will be able to buy assets during the fall, getting the average price.
3. Evaluate projects. During a downturn, it is important to pay attention to the outlook of each asset and how it is performing.
Remember: the cryptocurrency market is volatile, but a dip can also be a good buying opportunity.
