How to review the crypto market outlook?

Cryptocurrency gained maximum popularity in 2021. The growth rate of cryptocurrencies was so high that new currencies were added to the list almost every month. However, this is being one the most crypto volatility in the marketplaces in 2022.

Cryptocurrency volatility

The reasons that most influenced this crash were inflation, strict regulations in some countries, and rising interests. Cybercrimes have also played a role in forcing investors to shift their investments due to security risks.


After the constant downfall of the crypto market, it finally got some relief in July. The prices of the two most valuable cryptocurrencies, bitcoin, and Ethereum, rose by a few percent during the same month. But this certainly doesn't mean that the crypto marketplace is entirely out of danger.


Why did the crypto market crash?


Investors were shocked after crypto faced its first crash ever. But after hitting its all-time low value for the second and even the third time, analysts started to notice the volatility of the crypto market.


It is a highly unreliable and volatile marketplace. Therefore much cannot be predicted about its future. Another reason why crypto is so unpredictable is because of its decentralization policy. Experts believe that the internal flaws of cryptocurrency don't have a significant role in any of the past crashes. Instead, economic disruptions have been held responsible.


Despite all the factors, what concerns the investors is whether crypto will rise again after the recent downfall or not.


Performance of crypto in July 2022


The crypto marketplace seemed to have started recovering from the recent downfall in June. The situation got even better just after the beginning of July. The most valuable currency, bitcoin, regained about 20% of its recent highest price.


The last time bitcoin was seen flourishing was in October 2021. However, this year it regained its dominance in the market after touching about $17,708 in June. Bitcoin is expected to enter August with a price value of about $24,000.


Whereas the second most valuable currency, Ethereum, regained about 58% of its all-time highest price. The price of Ethereum in July was way higher than what the experts had expected of it.


A very significant role in the crash of crypto, mainly bitcoin, was played by Tesla, backing off from its investments. Tesla sold about 75% of its bitcoin assets in 2021. Despite the market being down for months now, investors are still as interested as they were back in 2021.


Will crypto crash further?


According to finance experts, the chances of the crypto market crashing further are still high. This is because the price values of even the most popular cryptocurrencies still haven't reached 50% of their all-time highest values.


No matter how better the situation for crypto has become, the market is still in danger. If we compare the values of bitcoin and Ethereum, it can be seen that Ethereum is still performing relatively better than bitcoin.

This time the crypto market is expected to stay low for a little longer than it did during 2020.


How to stay safe


The chances of cryptocurrency crashing even further have made the investors worry about their crypto assets. The market is highly volatile and unreliable and has developed the need for investors to take precautionary steps to keep their investments safe from further drops.


A few steps that may help you ensure the safety of your crypto assets are discussed further.


Firstly, make sure to get a better crypto exchange. With the increasing popularity of cryptocurrencies, new applications are being launched. These applications provide crypto wallets with additional services like tools that allow the users to swap cryptocurrencies automatically with others. This allows the users to keep track of the current prices of cryptocurrencies and keep up with the trends.


Secondly, it is essential to diversify your crypto investments. This means expanding your investments to other areas like stocks, bonds, and mutual funds and investing in markets that aren't as versatile as the crypto market.


Thirdly, keeping your budget, savings, and risk tolerance in mind while investing in crypto is very significant. For instance, the consequences of a loss are way more intense when your risk tolerance is low. Reconsidering your financial status gives you a rough idea of the outcome of different situations.


Moreover, having a good amount of savings as an emergency fund is crucial. Emergency funds allow you to stay stable even after losing a significant share of your assets.

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