Cryptocurrencies have recorded massive losses as buyers dry up. In the near term, technical analysts are seeing a scenario of a deeper pullback in play.
While the ongoing market correction has decimated many cryptocurrencies in its wake, Ethereum wunderkind Vitalik Buterin is suggesting that the mass purge is actually good for the long-term health of the cryptoverse.
True Crypto Believers “Welcome” Crypto Winter
As naysayers like gold bug Peter Schiff gleefully cheer the current abysmal state of the market to mean bitcoin is completely doomed, Buterin says true believers and devoted engineers who are building things would surprisingly be open to another bear market.
Why? Because the people that remain in the industry after a bloodbath are die-hard enthusiasts and innovators, not flaky wild speculators. “They welcome the bear market because when there are these long periods of prices moving up by huge amounts like it does — it does obviously make a lot of people happy — but it does also tend to invite a lot of very short-term speculative attention,” Buterin told Bloomberg.
The Ethereum co-founder added that hype projects are likely to die during a bear market as only the sustainable ones (in terms of their structure, teams, and community) will be able to weather the storm.
Bitcoin and other cryptocurrencies have been in a downtrend ever since they hit record highs in November. The world’s favorite cryptocurrency broke below the crucial psychological $40,000 level to trade at $38,366.86 as of publication time — a sharp drop of 4.39% on the day. BTC is presently off 44.4% from its all-time high of $69K.
Ethereum, the world’s second-largest cryptocurrency by market cap, is faring worse. ETH is worth $2,658.53 — 46.5% lower than its November peak.
$30,000 is the next support level that analysts are now eyeing for bitcoin. If this level fails to hold, the BTC price could plunge further, just like the 80% pullback during the bear market in 2018.
The Bottom Line
A prolonged bear market is obviously frustrating for cryptocurrency investors. To survive, they need to stay the course by adopting a long-term mentality, instead of a short-term mindset.
Buterin sagely points out that depressed prices will help those building on crypto to turn their full attention to improving the infrastructure and technology that can encourage greater adoption.