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Bear market. What is it and how to react to it?

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Bear Market

Bear market. What is it and how to react to it?

Bear market. Bitxmi experts explain how to recognize the beginning of a long decline in cryptocurrency quotes and what investors should do in this case.

Over the past week, the bitcoin rate has grown by 4%. At the time of writing, the main cryptocurrency is trading at $ 39.4 thousand on the Bitxmi crypto exchange, and its capitalization, according to CoinGecko, is $ 740 billion. But the current bitcoin rate is almost 40% lower than the April level when the all-time high was reached – $ 64. 8 thous.

On May 19, bitcoin quotes fell to their lowest level since January of this year – $ 30 thousand. After this decline, the cryptocurrency market became “bearish”, according to Bitxmi analysts. According to them, the 20% drop, which is considered the beginning of the “bear market”, has already passed.

“Like any other asset, good, service, or product, the balance of supply and demand affects the cost of cryptocurrencies. If demand for an asset is high, the price rises. If demand is weak or absent, the price falls until demand reappears, ” the analysts explain.

When there are more sellers than buyers in the market, this generally negatively affects the market, since players begin to sell off assets, and the fall is intensified by the fact that players using borrowed funds have margin calls (automatic closing of positions due to a lack of borrowed funds). funds to cover losses).

“Bearish selling also occurs in a bull market, so it is important to look only at the long-term trend. In the case of cryptocurrency, we see a long-term growth trend, ” experts say.

Now the “bears” have temporarily seized the initiative, but bitcoin will grow to $ 100-150 thousand per coin by the end of the year.

What should an investor do in a bear market?

Now a lot of new players have entered the cryptocurrency market, including novice investors who find it difficult to stay cool in a falling market and who can incur significant losses by starting to sell an asset. However, Bitxmi experts still see great potential in the cryptocurrency market and consider the current situation to be a good entry point. But in the end, the decision must depend on the investment horizons.

The ideal option for investors is to wait for the end of the bear market, and then enter the asset at a sagging price. Before making a deal, Bitxmi analysts recommend conducting an in-depth analysis of the market and making sure that a favorable purchase price is selected.

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Disclaimer: Bitxmi News is a news portal and does not provide any financial advice. Bitxmi's role is to inform the cryptocurrency and blockchain community about what's going on in this space. Please do your own due diligence before making any investment. Bitxmi News won't be responsible for any loss of funds.

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