Steemit Crypto Academy Contest / S1W4 – Reviewing the Instability of the Crypto Market by @bolaji001

Hello steemians, it's my pleasure to write here again on the Steemit crypto academy community, trust we are all doing fine as we are all planning to recover from the recent cryptocurrency dip.

Designed using Canva.

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INTRODUCTION

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As a professional trader, I know crypto dip is not new to us, but for the newbies in crypto trading dip might look so new and strange, the consolation is that we are in it together and we will all recover together for those who still held on their tokens.
Today I will be emphasising on the cause of the cryptocurrency dip, how soon it will recover and the possibility of its recovery and also, I will be talk on line on Terra blockchain that is at the edge of collapsing.

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What do you think of this drop? State its causes and how long do you think it will continue in this downtrend?

Personally, I knew that there will soon be a crypto fall, I will show my reason for saying that as we go on, as it was discussed in the lesson introduction crypto had a major fall around this time last year which made a lot of people lose interest in crypto, the good news about cryptocurrency is that only the holders enjoy more profit.

According to my analysis, looking at the weekly time frame I saw it that crypto was going to really fall. As we are been thought by our professors in the steemit crypto academy, we have to go to the weekly timeframe to check for future signal about cryptocurrency, but what I do mostly is that I check for only bitcoin because I Know if bitcoin falls all other altcoins too will fall also.

Checking the weekly time frame, I noticed that during that second half of 2021 we had a substantial rise of Bitcoin, which rose to $67k we were so happy, in fact so many analysts was predicting bitcoin to $100 before the middle of 2022 not knowing that the market was trying to form a structure, Bitcoin dropped to $51k and started consolidation around $46k for some weeks. After then, Bitcoin had a major drop down to $36k before a retest to $46k at the beginning of this year, before the major drop that just happened.

WHAT ARE THE CAUSES OF CRYPTOCURRENCY DROP?

• There are so many causes that contribute to the fall of cryptocurrency, but the major cause was the news released by the United State government to regulate crypto transactions by adding more tax fee.

• Another cause of the fall in cryptocurrency is because UST, which is supposed to be a stable coin crashed which affected Bitcoin the parent of all cryptocurrencies in some ways leading investors to sell their crypto assets thereby leading to the fall of many other currencies as well.

• The banning of crypto assets by some countries in the world contributed to the fall of cryptocurrency, because currently in my country, Nigeria crypto has been banned and so in some powerful countries like China also are trying to regulate cryptocurrency.

• The war brought to Ukraine by Russia also added to the fall in the cryptocurrency market and with the war still going on till it is having its own negative effect on the crypto market.

HOW LONG DO YOU THINK IT WILL CONTINUE THE DOWNTREND?

FUNDAMENTAL ANALYSIS
The down trend might stay for some time or change the trend, as we all know that cryptocurrency is been driven so much by the news and whales, if we can recall what happened last year when China released news about regulating cryptocurrency, within fee days crypto fell so much to the extent that the greed and fear indicator was indicating extreme fear

TECHNICAL ANALYSIS
The price started from $67k, dropped down to $34k trying then retest to $46k trying to form a head and shoulder pattern which Bitcoin actually did.

According to my analysis, Bitcoin is currently ranging around $29k to $31k and this has been happening for some days now.

Looking at the weekly timeframe I noticed that market price has broken the $29k support and looking at the RSI also it's almost at oversold but not too oversold, so this indicate that the price is still going to advance down more.

But I am looking at the support at $17k which I tagged support 1 and another support at $15k which was not indicated, I really hopes it doesn't break all these support , because if it break them it might still continue to go down.

This is just my simple analysis.

Why doesn't this drop in the price of a few coins decrease their trading volume (e.g.: Bitcoin)? How will they deal with this market instability?

Yeah!!!!

Some coin like Bitcoin did not decrease but increased in trading volume, the current trading volume of Bitcoin is $31,514,008,679.39 and a dominance of 44% in the cryptocurrency market and some other coins to has very high trading volume during this dip.

Why some of these coins are having very high trading volume is because most professional crypto trader knows that the best time to buy in crypto market is when we have some much dip like what we are facing currently in the cryptocurrency market.

The trading volume of some major cryptocurrency has increased massively because this is the time so many people are waiting for to buy some crypto asset, because any traders who buys at the dip will have maximum profit and when the cryptocurrency market was still high some many traders cannot afford to buy some crypto asset, but now that there's a dip some many traders that have more in-depth knowledge about cryptocurrency are already buying in bulk.

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?

Source
Terra blockchain is such an amazing blockchain that has been doing well right from onset and has been named one of the most successful blockchain in the cryptocurrency ecosystem, Terra coin has some crypto asset built on it, LUNA is a major coin built on Terra blockchain and been successful since it have been listed, Luna was listed around $0.002 and ended at an all-time high of $89 as at the end of 2021, as if that was not enough Luna continue to soar up at the beginning of this year and got to $120 all-time high.

LUNA has major investors in the cryptocurrency market, the likes of Galaxy Digital, Coinbase Ventures, Pantera Capital, these investors has lost a bulk of fund invested in Terra Luna, also as a whole the cryptocurrency market has lost 800 billion dollars due to the crash of Terra blockchain which has brought a big question mark concerning the future of the cryptocurrency market.

Huge and quick steps (but must still be well structured) have to be taken by the founders of the Terra company in order to recover from this massive dip that has befell them.
One suggestion I would make is that the TerraUSD should be pegged back to the USD.

CAUSE OF CRASH TERRA ECOSYSTEM AND LUNA.

To our greatest surprise with the current dip Luna was still struggling not to decrease in price, Luna's decrease was negligible at first but unfortunately it crashed some days ago, I will be emphasising on the causes of the crash.

• There was a rumor that Gemini the founder of Luna, Do Kwon loaned out 100k Bitcoin, which is going to affect the blockchain, this made little investors start selling off their crypto asset but this news was condemned not to be true.

• The head of federal reserve in person of John Powell released a news about regulating cryptocurrency and currency, this news increased the tax for each transaction made by crypto traders and this also added to the crash of Terra Blockchain.

• The fight between Ukraine and Russia has also contributed to the crash of Terra Luna ecosystem. Since the beginning of this fight which has lasted about 2 months now, cryptocurrency have been facing a kind of imbalance since then.

DO THINK LUNA CAN RISE AGAIN?

This is a big question, and this question has been going round on all social media and cryptocurrency platforms. Personally, I have done some research about Terra blockchain.

Before the crash the total Luna in circulation is about 6 billion and if like half of these can be burnt the coin still have hope of rising back up to $5 but the assurance that it's going to go back to where it came from is very slim because so many people that invested in the coin has already lost their trust for the coin and when there are no investors, it will be difficult for a coin to rise to its maximum level.

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.

Steem ecosystem has been one of my best ecosystems since I have started cryptocurrency and I have benefited a lot from the Steem ecosystem. Since the beginning of the crypto dip, I have been able to secure more Steem power, because I was not encouraged to power down and withdraw from the Steem blockchain, my sole aim is to hold as our dear Steem token is also affected by the current dip in the crypto market. Our Steem token dropped from $0.45 to $0.24.

I never lost confidence in the steem ecosystem, though the dip also affected the ecosystem but I will always stand by the steem ecosystem because I know that steem will recover fully and all lost glory will be restored.

Currently in the Steem ecosystem, SBD is not given because of the steem and SBD debt ratio which has increased more that 10% and anytime the debt ratio is more than 10% only STEEM, TRX and SP will be given for each curation and the major cause of this is the decline in price of Steem.

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CONCLUSION

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We all know how volatile the crypto market is and this how it is dependent on the buying and selling rate of the investors. Due to the decrease in price of Bitcoin and some other factors like increase in interest rate on crypto transactions by the U.S Feds, this has led to great increase in sellers of crypto assets as compared to buyers.

As with everything in life nothing is permanent, there are ups and downs, there is no smooth road to greatness. The crypto market is just in its down time and I am very optimistic that the investors would join the market very soon and the dip would recover greatly.

I like to be very optimistic and look for the good out of every situation. I think the current situation with the crypto market has its own advantage as it is the best time for us to invest in coins or tokens with huge potential and hold patiently. I wish you best of luck bagging productive coins.

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I would like to invite my friends, @olawole111, @kennydavebobo, @ojerindejoel to participate in this contest, reviewing the instability of the crypto market.
#cryptography