The recent cryptocurrency market pullback has wiped out $1 trillion from the aggregate crypto market value since the highs in November. Bitcoin price has dropped roughly 50% from its peak, dipping into extreme fear territory.
Let’s take a look at some of the past week’s major events.
- Russia calls to ban Bitcoin mining in the country: The third-largest crypto mining country in the world has proposed a blanket ban on cryptocurrency mining. Russia has been an important center for digital asset mining after China put all mining activities to a halt last year.
- The Bitcoin price plunge below $33,000 on January 24 caused $100 million in liquidations within an hour.
- The Solana network suffered an outage on January 21, due to bots performing excessive duplicate transactions. Many trades were liquidated on Solana-based DeFi protocols, as they were unable to repay loans or add liquidity to their portfolios. The network has introduced a new version, v1.8.14 which the team believes would improve the state of the network over the next three months. SOL price has continued to drop following network congestion issues.
- Walmart is venturing into the metaverse as it plans to create its own cryptocurrency and non-fungible tokens (NFTs).
- Over the weekend, El Salvador President Nayib Bukele purchased another 410 Bitcoin for $15 million amid the market dip.
Is it a bear market?
Many investors are asking this question, yet no one knows for sure. The Bitcoin fear and greed index is flashing a reading of 13, indicating that traders are now in “extreme fear.”
The BTC Relative Strength Index (RSI) has also reached the lowest point in two years, previously observed back in March 2020, caused by the financial crisis stemming from the COVID-19 pandemic. While the indicator is often used to determine and pinpoint reversal points when prices reach overbought or oversold values, it may still take a while before a recovery is in the offing.
In any situation, especially when the market has been dumping, it is crucial to put in place proper risk management measures, to ensure that losses are minimized.
With CoinPanel’s stop-market and stop-limit features, you can set stop-losses to avoid losing large amounts of money, and also set buy orders to purchase assets at a lower price if the market slides further.