Crypto Academy Contest / S1W4 – Reviewing the Instability of the Crypto Market by @maazmoid123

Hello everyone,

Good day everyone. I hope you are all doing well. Today I want to invite you all to read my participation in week 4 of the STEEMIT ENGAGEMENT CHALLENGE, till now it has been a perfect journey, and I have never seen so much engagement in the steemit platform ever. So it is a good sign.

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This week the crypto-academy has asked us to share our views regarding the current Instability of the Crypto Market, so I will be sharing my opinions regarding that in my today's publication.

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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

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We know that the crypto market is the most volatile right now, and from the start of 2022, we can see that this is the year of bearish. But it is not very rare for someone who has been in the crypto market for some time. We can see the example of 2017, when the biggest downfall of the cryptocurrency accord was when most of the coins lost 90% of their value. So this bearish season has to come today or some other day, so we all had to be prepared in advance.

To trade in the crypto market, a person should not be soft-hearted, as right now, we have been listening to the news regarding the suicides. When a trader comes into the market, they know whether they will be a long-term trader or a short term. And for me, long-term trading suits me more as I know that the prices of these coins will grow one day, and I don't want to lose everything in short-term trading.

If we see the market, we can see that the market has maintained a downtrend in 2022. The Bitcoin could not sustain above 55k, which scared the investors, and the investors were more scared when the bitcoin price went below the 30k mark. Which causes the market to fall.

The other cause of the drop state was the Terra blockchain, as in just the past week the Luna has lost its value, and the Terra blockchain was almost finished, so this is also a big reason for many to be scared as Luna who used to be a stable coin lost its value in just some days.

This happens among the investors, which causes the market to go further to a bearish level. The term that is very common to use in these situations is known as FUD, fear, uncertainty, and doubt. So, in my opinion, those were the two main reasons which caused the drop state in the crypto market.

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HOW LONG DO YOU THINK IT WILL CONTINUE IN THIS DOWNTREND?

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We all have been victims of these kinds of situations many times, and we know that nothing is permanent. We have seen many drop states as well as a bullish market. The market will be back, and the trend will be the opposite of the current trends.

I can not say how long it will take for the downtrend to finish, as we have witnessed a great blockchain going to zero. Many people might still be in shock, but they all will be back. Even if those investors do not come back, there will be someone else ready with their investment to fill those gaps, so we do not have to worry about whether the market will go into an uptrend. It will undoubtedly go in the uptrend, but maybe it will take some time this time.

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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?

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You all know what is trading volume, Right? And if you don't, then don't worry. Trading Volume is the number of tokens or shares in the market that can be sold and bought. And suppose we see that even this drop situation does not decrease the trading volume. In that case, there are still investors holding the asset. This means the price will soon return to its normal state, and it is also a signal for a bullish market.

When the investors are not selling their assets and have held onto them, they are still confident and will not be leaving this market, which basically shows a positive signal.

HOW TO DEAL WITH MARKET INSTABILITY:

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We know the crypto market is very volatile and after every few months, this instability in the market starts showing its colors, so to deal with the market instability is to just wait, study the market, and try to learn as many things they can regarding this situation. And I definitely do not advise anyone to jump into this market, as many people I know bought Luna when it reached $1 from $120, but the drop didn't stop there, and the price went near to $0.000001. So many people have lost a lot in this. The best thing to deal with the market instability is to do nothing and keep yourself updated on the market's current situation.

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WHAT IS THE RELATIONSHIP BETWEEN THE CURRENT INSTABILITY AND THE DOWNFALL OF THE TERRA ECOSYSTEM AND ITS LUNA CURRENCY?

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The downfall of the Terra ecosystem has affected the whole crypto market, as we know that the Terra was a big blockchain having a market capitalization of $25 billion. But when the instability began, the investors started losing their trust in that ecosystem, and because of that, they started taking out their money from the blockchain, which resulted in the total market capitalization of the Terra Blockchain going to $2.5 billion. So that is a considerable amount that has been taken out from the crypto market.

And at the same time, the bitcoin price was not much stable, so many people started selling their crypto in the fear that the crypto might end now, which definitely contributed to the current stability.

The TerraUSD was a stable coin of Terra blockchain, just as SBD is a stable coin of Steem Blockchain, and it has to be equal to $1. But for the investors, it is okay if the price goes above $1 as from that they will make more profits, but if the price goes below $1, it will definitely scare the investors, and the investors will shift to some other stable coin. And this is also one of the reasons for the current instability that the Stable currency went below the $1.

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DO YOU THINK ITS PRICE WILL BOUNCE BACK? IF SO, TELL US HOW AND WHEN?

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It is challenging for Luna's prices to go up again, as many investors are already scared of the Terra Ecosystem and will not want to risk their money. But everything is possible if the Terra Blockchain team might work hard to make it again from scratch. So maybe it will take some months or a year for the Luna to rise again.

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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

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I have already said that I have seen these types of situations many times. I also saw the crash of 2017-18, when the steem price was above $5, and after the crash, it went to an all-time low. Maybe at that time, I was a new 17-year-old kid in the market who did not know about this ecosystem, but I never doubted this project.

But of course, as a human, it never looks good when your account value was showing the worth of $3000, and then the next day, it went down to below $1700. I always thought I worked so hard for it, as even on my busiest day, I tried to participate here, so I can't lose this. But still, I have the hope and confidence that there are some genius minds involved in this ecosystem that will not let this project fail.

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Regards,
@maazmoid123

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