Bearish crypto market: cleaning up the sector?

The crypto winter of 2018 has gone down in history as a period of great crisis. However, 2018 was also a jumble of opportunities: both for cleaning in the sector and for buying at very attractive price levels. Is history repeating itself today?

According to Coinmarketrate.com With nine weeks of losses in a row, Bitcoin is currently experiencing a historic recession and recently traded below the important $30,000 mark for four days. At the beginning of the new week, it attempts to recover – and thus compensates for what the US stock market has already achieved on Friday.

The fact that the oncoming movement on Wall Street initially failed to give the cryptocurrency market an appropriate impetus caused additional concern in the industry. “This is the kind of denouement that no one wanted,” commented Anthony Trenchev, co—founder and managing partner of Nexo crypto bank, to Bloomberg.

After some delay, Bitcoin and other currencies are now also trying to recover. After Bitcoin remained almost without momentum below the 30,000 mark over the weekend, it moved again early on Monday morning and broke through the horizontal resistance in this area.

It was trading about 7.5 percent higher this morning at about $31,600 on a 24-hour basis. So at least the direction is right again. However, in order to break out of the sideways trend that has lasted for several weeks, the BTC needs to overcome the upper limit in the area of $ 32,300.

Altcoins are on the rise

At the beginning of the week, some of the major altcoins achieved even greater success. In the top ten by market capitalization, Ethereum, Cardano, Solana and Dogecoin, for example, are gaining even more than Bitcoin. However, over the past few days, these coins have suffered even more serious losses and are still trading in the red much less than the BTC since the beginning of the year.

In the current environment, Bitcoin investors still need patience and strong nerves. Today, there are good chances that in the long term, crypto asset No. 1 will go into rally mode again.

Is there a purge coming in the world of cryptocurrencies?

Of course, this is a hypothesis that many will not even consider, especially if they are adherents of those crypto assets that have reported the largest percentage losses, but it is most likely, at least if we consider a parallel with 2018. As with stocks, cyclical downturns in the cryptocurrency world also serve to separate projects that have a future from projects with less solid fundamentals.

If we go back to the time between 2017 and 2018, then, reviewing the capitalization ratings, we can see cryptocurrencies that newcomers may have never heard of. Such as NEM (which still exists), LISK, Siacoin, Bytecoin, Verge, Status, Steem, DigiByte, Dragonchain, Populous, Dentacoin or even Bitconnect.

Cryptocurrency Crisis

The wave of crisis overwhelmed several, but left behind a lot of projects that we see today. To paraphrase Warren Buffett, we can say that when the bullish wave recedes, it is revealed who is swimming naked. And this can happen with many projects that will not stop their decline in the short or even long term. The first problem, however, is for investors: it is extremely difficult to separate the good from the bad. That is, to choose tokens that will surely pass through this phase unscathed.

There are several projects that, according to many experts, will return to more attractive price positions. This list is not exhaustive.

• Polygon Matic

Given the significant investments and no less significant expansion of commercial activities, experts believe that MATIC may continue to have its advantages, and the project will not want to play the role of a victim in this cycle.

• Chainlink

In our opinion, he has been paying for a reckless fall for some time due to a sharp decrease in the hype around the project. However, it is difficult to think that the token will die like this, even considering its crucial role in the world of DeFi and smart contracts. Indeed, several oracle systems have appeared, but Chainlink remains and, in all likelihood, will remain the most relevant in the Ethereum world.

• Binance Coin

A relatively safe bet. In recent weeks, it has shown the best performance in the sector, being in the phase of lateral movement. A sign that the project is reliable, as is the exchange behind it. To think that Binance will not be able to survive a bear market is, at least in our opinion, madness.

• Ripple

Perhaps this is the most unloved project, but it is true that those who look at the market from a financial point of view should not be limited to such considerations. Ripple must win its lawsuit against the SEC and may even begin listing on the stock exchange. They may not like their ongoing attack on Bitcoin, but with regard to the commercial foundations of the project, at least in our opinion, there is practically nothing to discuss.

• Uniswap

Volumes have skyrocketed despite a terrible period for the entire DeFi world. In our opinion, including thanks to new partnerships at the technological level, it will remain the most relevant AMM in the world.

Movement in the long term

No one has a crystal ball, and no one can determine the bottom with 100% certainty. The fact remains that analysts consider the aforementioned cryptocurrencies to be good candidates for recovery in the long term. This is not financial advice, but an analysis of what, in our opinion, is obvious to most.