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Industry Experts on Bear Market: Bear cycles are clearing the market and healthy

 


Crypto markets are clearly bearish, but some industry insiders believe such conditions will drive out the bad players and create greater opportunities for future participants.


Traders tend to complain about negative price action and how difficult it is to make profitable trades when markets are down. However, several leading analysts and developers agree that now is the right time to position yourself well. Then one could count among the big winners when the upward mood returns.


Polygon co-founder Mihailo Bjelic told CNBC on Friday the current downturn and new big selloff earlier this month is exactly what the market needed.


Bjelic believes the market has become "maybe a little irrational or maybe a little reckless" as the total market cap of all cryptocurrencies increased 12.5x between November 2019 and November 2021. This tremendous growth rate has surpassed most other traditional markets:


"At times like this, correction is usually necessary and that's ultimately healthy."

The market is currently in a major correction. Since November of last year, the total market cap of all cryptocurrencies has fallen by 60 percent from $3 trillion to $1.2 trillion, according to CoinGecko . Cointelegraph reported on Saturday that traders are still expecting further declines as the latest bear market saw prices plummet about 80 percent overall.


Crypto market analyst The DeFi Edge added that bear markets would bring benefits to most market participants. The user tweeted on Sunday, "Bear markets are healthy for crypto growth."


He comes to this conclusion because in a bear market there are fewer new entrants targeted by scammers . Last year, Bitcoin ( BTC ) transaction volume peaked on November 9 at 335,411. This increase in volume also coincided with the all-time high. On Sunday, transaction volume fell 38 percent to 207,859 , according to Blockchain.com .


Less activity means fewer opportunities and lower profitability for scams, so these tend to go away.

Jason Ye, a partner at crypto mutual fund ROK Capital, said that despite lower prices and activity, bear markets are an excellent opportunity for traders and developers to position themselves and have even more success when market sentiment turns around again. He told Cointelegraph Monday, "In a bear market, look for the best fundamentals and focus on building a product."


"It's time for traders to use their cash reserves to profit in the next bull cycle. As always, the winners of the bull market are those who put in the work in the bear market."

Alex Becker, game maker at Metaverse gaming platform Neo Tokyo, shared his thoughts in a tweet similar to Ye 's on Saturday . He also believes that bear market buyers are most likely to make profits in a bull market. He said, "The big money is made by buying in a bear market. Most of the losses come from buying in a bull market."

Becker added the key factor is to buy low and sell high. He also believes that people on Twitter are very pessimistic and aggressive about bear markets and he finds that "ironic".

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