Steemit Crypto Academy Contest || S1W4 || Reviewing the Instability of the Crypto Market by @malikusman1
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Most of the cryptocurrency market is currently experiencing a sharp decline, especially in recent days. What do you think of this drop? State its causes and how long do you think it will continue in this downtrend?
The cryptocurrency market is rapidly expanding. This isn't a shocking story. I'm sure you're aware of both sides of the argument. Crypto has produced both kings and peasants. However, those wins and losses aren't always due to winners selecting good coins and losers selecting bad ones.
It's possible to speak with two persons who both invested in Shib coin, but one lost money while the other made money. When it comes to winning or losing, time is crucial. This is because bitcoin is a very volatile investment; all cryptocurrencies exhibit large variations in their value, which is referred to as volatility. Cryptocurrency is a very volatile asset class.
My dear friends as we know that in November 2021 Bitcoin made his all time high and after that we have seen a huge correction in it due to some bad news or LUNA crash. Because volatility is an important part of the market. So, now I will explain the causes of of this decline.
In the cryptocurrency market we have seen a huge decline due to Terra (LUNA) huge crash. Because LUNA was very popular coin in the crypto market and its rank is 10. The market cap of this coin was nearly 25 billion dollors. Then suddelny its price decline from 119 dollors to 0.0000012.
Thats was a huge decline and the investors face a huge loss in the form of LUNA coin and become panic. Due to this the crypto market was faces a huge crash in its prices and bitcoin price touch 25,000 dollors. Its all due to Terra (LUNA) coin. So, this was the main reason behind the recent market crash.
I've been in several of these situations, and we all know the crypto market is extremely volatile, and no one can forecast its future. The crypto money market has seen many ups and falls. If the market falls, it quickly returns to an uptrend, and if it rises, it quickly returns to a downtrend.
As we have seen, a fantastic project like LUNA does a great deal of harm to many people. Many individuals are still in a huge stress, but they will all return in the future to make up for their losses. And now, if we talk about how long this downturn will last, my prediction is that it will last till the end of the year.
Why doesn't this drop in the price of a few coins decrease their trading volume (eg: Bitcoin)? How will they deal with this market instability?
Because as we all know, bitcoin is the king of the crypto world. Many peoples believe on bitcoin more reather than other crypto coins. There is less chance of loss in bitcoin. because it is a very strong and fundamental coin in the crypto market. In a market crash this is the only coin that recovers in less time.
This is the only coin that has been bought by big countries and big companies so that they can benefit from it. That is why whenever the market goes down, big countries and companies buy it cheaply so that they can take advantage of it in the future.
The Bitcoin price has plummeted below $25,000 in recent days, but we've also seen that the market volume hasn't been hurt too much due to people's trust in these coins. This indicates that market investors are still confident and are retaining their investments rather than selling them.
Traders who are concerned about their large losses in this negative market need not be concerned since when the market is in a decline, it is time to shop. This is the moment to increase your investment and keep it for a long time in order to make a significant profit. So, don't get panicked, invest in fundamentals coin, forget about it for a long time, and reap the benefits later. In this way we can deal this market instability.
What is the relationship between the current instability and the downfall of the Terra ecosystem and its Luna currency? Do you think its price will bounce back? If so, tell us how and when?
Terra (LUNA) is the main crypto coin that affected the crypto market very badly. The UST coin, like all other stable coins, always trades at a 1:1 ratio with the US dollar. The Bitcoin dump began on May 6th, and the global market fell by around 7.46 percent. Since then, the price of LUNA and UST coins has been declining.
After that, the LUNA token and the UST coin began to lose momentum as the UST stable coin market's whales began to sell the coin on numerous exchanges and platforms. A large amount of UST has been sold up until the night of May 8. On the night of May 8, the UST stable coin lost its 1:1 ratio and was trading at $0.98. The LUNA token was also down roughly 6%, with a price of $74. You can also see the red candles in the screenshots below.
Above and below Screenshot taken from here
The LUNA coin lost too much circulation on May 9 and was only exchanged for $46. The LUNA coin had lost nearly 62% of its value. Similarly, the UST coin suffered a significant decline and was trading at $0.69.
Due to the crash of USt and LUNA, investors were panicked, and the Terra company sold a large number of Bitcoins from their reserve, resulting in a market crash.
Yes, its value will recover in the future. If the project's owner develops it with new optimism and new blockchain development. One of the key reasons for its price recovery is its large supply. If its community burns LUNA, it may be able to recover; otherwise, it has no chance of rising. And if its team did not complete the reasons that i described above. Then it would be the end of LUNA crypto.
Our Steem ecosystem, like most currencies, has been affected by this market downturn, has this caused you as a user some stress? Or are you still confident in this project? Give your opinion, specifying the arguments that support your review.
Looking at the current situation of steem coin, I am not at all stressed because it is a wonderful project. In the past, when I was new to this platform, I take strees a lot about the value of steem coin, but over time, I came to believe that this is a great project. But what I like most about it is that if the price goes down, it goes up as fast as the market recovers, which is a good thing. I admit that the price of the steem has come down a lot in the past but it has maintained itself a lot.
The Steem blockchain is so outstanding and good that the price of Steem nevers fall below the ground level. Since joining, I have never seen the price of steem fall below 15 cents. Last but not least, steem is my favourite project. I haven't take any stress about the price of steem coin it in the last 6 to 7 months. Because I am confident in the future of steem.
Regards;
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