Market cleaning bear cycle is healthy, industry experts say

There is no denying that the crypto market is bearish, but some in the industry believe that these scenarios will rid bad actors and create greater opportunities for future players.

Traders tend to lament negative price action and the relative difficulty of executing profitable trades in bearish market conditions. However, several leading analysts and builders agree that now is the time for action that will bring the greatest gains when bullish sentiment returns.

polygon (MATIC) Co-founder Mihailo Bjelic Tell CNBC said on May 27 that the current downturn and Recent major sell-offs Just what the market needed earlier this month.

Bjelic believes that the market has become “perhaps a little irrational, or maybe a little reckless,” with the total cryptocurrency market capitalization growing 12.5 times between November 2019 and November 2021, a staggering growth rate that outpaces most other traditional markets.

“When that time comes, [a] Corrections are usually required and at the end of the day [is] healthy. “

The market is currently undergoing a major correction. Total market capitalization has fallen 60% from $3 trillion to $1.2 trillion since November, according to the data. Coin Tiger. Cointelegraph reported on May 28 that traders are still expect more painespecially considering that the last bear market caused prices to drop by around 80% overall.

Crypto market analyst The DeFi Edge adds context to the idea that the benefits of a bear market align with the interests of most market participants. The account tweeted to its 164,000 followers on May 29 that “a bear market is healthy for cryptocurrency growth.”

This reasoning is based on the observation that there are fewer new market participants, where scammers as a potential target, entered during the bear. In the past year, bitcoin (bitcoin) volume peaked at 335,411 on Nov. 9, in line with the price peak. On May 29, transaction volume fell 38% to just 207,859 according to to Blockchain.com.

Lower activity means fewer opportunities and lower profitability to run many scams, so they tend to disappear.

Jason Ye, a partner at crypto investment fund ROK Capital, explained that despite lower prices and activity, bear markets are prime times for traders and builders to set the stage for greater success when market sentiment reverses. “In a bear market, it’s time to find the best fundamentals and focus on building the product,” he told Cointelegraph on Monday.

“Now is the time for traders to deploy their cash reserves to gain upside in the next bull cycle. As always, the winners of a bull market are those who build in a bear market.”

Alex Becker, game producer of the Metaverse gaming platform Neo Tokyo tweet May 28. He also believes that bear market buyers are the ones most likely to profit in the next bull market. “All the money was bought in a bear market. Most of the losses were bought in a bull market,” he said.

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Becker added that while buying low and selling high should be a key factor in driving crypto market participants, he believes that people on Twitter are the most unpleasant during bear markets, which he called “sarcasm.”