The crypto market has been witnessing a major downturn recently, with major coins like BTC and ETH having significant price declines. This crypto market bearish trend is impacting the global crypto community leaving many investors uncertain about the future of their crypto assets. 

Regulatory uncertainty, general economic challenges, market manipulation and declining interest contribute to the slump. Consequently, there is a substantial decline in the overall capitalization of cryptocurrencies.

More outstanding is that many smaller coins have experienced severe price drops, some almost becoming valueless. Meanwhile, the surge in altcoins challenges the dominance of Bitcoin and Ethereum.

A Case Study of the Crypto Market Bearish Trend

In a post on X titled “Why Is Bitcoin Dumping?” a popular influencer Ash Crypto explained the market slump. In his tweet, Bitcoin plummeted by 9% in 2 days, “$BTC was trading at $64,000 just 2 days ago, and today it crashed to $58,000,” and is still dropping.

Source: CoinMarketCap

Foremost, he attributed the market slump to the ongoing Russia-Ukraine war. During times of war, investors will sell risky assets. “Risk-on assets always get sold first during a war situation.” 

Thus investors sell their crypto assets considered more volatile (risky) than traditional assets like bonds and gold. This risk is further heightened by a likely escalation of the war according to Ash. “After the drone attack on Russia, it’s highly probable that the Russia-Ukraine war will escalate more,” said the crypto influencer.

Next, he cited Bitcoin Exchange Traded Fund (ETF) increased outflows as another contributor to the crypto market’s bearish trend. As investors withdraw their funds from a Bitcoin ETF, Bitcoin falls and other coins subsequently. 

Furthermore, Ash Crypto maintains that manipulation contributes significantly to the bearish market trend. He argues that the rise in S&P 500 and NASDAQ compared to the drop in BTC price is evidence of market manipulation.”S&P 500 pumped, NASDAQ pumped, but BTC dumped. This is a clear sign of market manipulation, as some entities are willing to suppress the BTC price,” said Ash in the post.

Then he highlights that large investors (“smart money”) are accumulating BTC at prices between $50,000 to $60,000. This, he claims, is reflected in the decreasing supply of BTC on exchanges.

What to Look Forward to

Ash Crypto predicts that once large investors quit stockpiling BTC, the price of the most dominant cryptocurrency will rise. “Once the accumulation phase is over (probably by September end), BTC breakout will happen,” said the crypto influencer.

Another factor that could lead to a bullish trend is decreased BTC supply on exchanges making its price appreciate. Also, Donald Trump winning the upcoming US presidential elections as he has campaigned that he’s pro-crypto.

However, a bullish market could continue if regulatory crackdowns and restrictions intensify, persistent economic headwinds, or prolonged market manipulation by major players.

Ultimately, the future of the crypto market depends on regulatory developments, macroeconomic conditions, investor sentiments, and market manipulation. Hence, it is important to approach the crypto market with a long-term perspective while bracing for volatility.