We will know that Bitcoin is known as the most prominent digital asset. It is because many investors have put their capital in a constant search for the diversification of investment portfolios, in addition to generating additional returns for their commercial operations. If you have to select the best option, start trading at Bit index Prime.
Cryptocurrencies have been characterized as financial elements whose volatility makes them more susceptible than traditional financial assets.
The development in the price of Bitcoin has shown how a digital asset can also be affected during a critical situation in the world economy.
The market capitalization of Bitcoin has demonstrated the strength and positioning of a said asset in the digital financial market, to the point that it is listed through an ETF on the Stock Exchange.
Investments in cryptocurrencies are considered high risk, but it is pretty interesting to determine the reason for this position, which could often be regarded as radical in the face of a constantly changing economy and points to its global digitization.
In 2022 we have seen how the digital financial market has suffered a pretty significant contraction, decreasing the value of many of its assets, where Bitcoin exceeded 50% of the value of its last historical maximum.
Bitcoin Bull Market
There are very particular terms regarding the Wall Street financial market. Although they were created in this environment, they may apply to cryptocurrencies.
This term usually refers to the development of the market and is linked to economic expansion; it all depends on how the economy generally evolves.
Bull markets usually occur after a market contraction, where the excessive supply of a particular digital asset precedes it, either due to a decrease in its price or because it does not represent a profitable investment at a specific time.
When a bull market is generated, more significant speculation is usually inferred concerning financial assets, in this case, digital assets such as cryptocurrencies, allowing higher levels of investment where the trust of its users maintains a certain level of balance despite the volatility of these digital assets.
In the case of Bitcoin, when it is going through a Bull Market, it develops its historical highs, which have reached considerable values and, therefore, profits that can be millionaires for its followers.
In this phase of the cryptographic cycle, Bitcoin has taken the opportunity to position a value that maintains it as the leader of cryptocurrencies; despite being so high, it does not represent a limitation for those who wish to enter this digital financial market.
Bitcoin’s All-Time Highs are closely related to a bull market. Among some of the most notable All-Time Highs are:
In 2013, it went from having a price of USD 150 to closing in November of the same year at USD 1,000, an increase of 1,000%.
In 2017 it reached a new maximum of USD 19,900, considered the biggest cryptocurrency boom in its history.
For the year 2021, a relatively high new value develops that many considered a New Year’s gift, exceeding USD 41,000, to later reach a new maximum of more than USD 60,000.
Bitcoin Bear Market
It is considered one of the most drastic markets since Bitcoin has considerable volatility. Its value could plummet in seconds and reach zero.
Until this year, 2022, the only time that Bitcoin had such a significant setback was at the beginning of its creation. This digital asset has shown considerable decreases to recover later and make corrections in its price.
The Bear Market term refers to the characteristics that this specimen possesses. For example, if it attacks, it always does so below; this market is usually used to define future positions and where the value could reach in a certain period.
In the case of Bitcoin and other cryptocurrencies, this stage that the market goes through is usually the moment in which investors with positions with this asset decide to sell before losing since its value changes drastically.
We have seen the value of a Bitcoin go from USD 19,900 to USD 6,000, and without going very far, the recently experienced crypto winter where Bitcoin decreased by 50% in its value compared to the last historical maximum of more than USD 60,000.
Digital currencies represent a new type of market that, although a decade has passed since they were created, there are still many aspects to learn about and investigate.
Changes in the price of these digital assets are usually drastic, which is why investments are risky compared to the traditional financial market; when the market is in turmoil, investments must be made with great caution.