Lessons Learned From The Recent Market Crash

The crypto market has started the sixth week with hard-selling after five weeks in a row. Yesterday, the Bitcoin price found support at the 30k level and reaction buying started across the crypto market.

The sales are not unique to the crypto market. High-rate sales occur across the world stock markets. Still, it is difficult to say that the crypto market has shown a strong outlook. The thesis that Bitcoin is a safe haven against inflation, for example, seems out of date. Institutions that want to buy Bitcoin are apparently not in a hurry in this regard.

Photo by Matt Hudson on Unsplash

The decline of TerraUSD (UST) to 0.66 cents yesterday was one of the factors that increased the tension in the market. Later, with the help of capital support, the UST reached the level of 0.9 USD. On the other hand, we are not yet in a position to argue that the perfect storm in the crypto market is over.

Extraordinary times are also a good measure to check the resilience of different cryptocurrencies against difficult market conditions. In the last week when the market was under intense stress, Bitcoin lost 18% and Ethereum 17%. In the last 24 hours, when the sales were very intense, Bitcoin lost 5.7% and Ethereum 2.8%. The numbers suggest that Ethereum stood stronger compared to Bitcoin. I would expect the opposite to happen, based on Bitcoin's larger market cap.

Let's not be unfair to Bitcoin though. Bitcoin's price fall was influenced by Terra's Bitcoin sales to support the UST price. And compared to the start of the year, Bitcoin and Ethereum have lost 33% and 37% respectively. As a general observation, we can also say that blockchains such as Solana, Avalanche, Terra, Sandbox, and Polygon, which gained value rapidly last year, were more affected by the latest wave of sales.

HBD performed well in yesterday's panic environment when TerraUSD dropped to 66 Cents. HBD traded on central exchanges decreased to 90 cents. On the other hand, pHBD traded on SushiSwap traded at the lowest level of 96 cents. At the time of writing, pHBD and HBD are bought and sold at 99.7 cents and 97.1 cents, respectively.

Last year, the value of my crypto portfolio increased by over 10x. Since the beginning of this year, my portfolio has lost 60% of its value in line with the Hive price. I try to comport myself by remembering the profits I made last year :)

Another observation I have made about cryptocurrency prices is that cryptocurrencies with high inflation lose a lot of value in difficult times. The common features of coins such as Bitcoin, Ethereum, BNB, Tron, and FTX, which have lost less value compared to others since the beginning of the year, are that their inflation rates are below two percent.

We don't know if the sales are over yet. This process may continue for several more months. I received some money yesterday. I bought extra HBD with them. 20 percent annual return is a good option in this environment.

During the 2018-2019 bear market, I disposed of half of my cryptocurrencies at a lower price than today. This time I am determined not to sell a single coin. Let's see what the next days bring.

Thank you for reading.

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