Why Is The Crypto Market Down In January 2024?

The year 2023 started on a positive note for most cryptocurrencies. Last year after bearing the brunt, most of the crypto tokens took the path of recovery. However, the crypto prices are still low as compared to their all-time highs.

The price of cryptocurrencies has been through a rollercoaster ride in the first half of the year. Will the other half be a slow growth or will the cryptocurrencies reach new heights and recover completely from the loss faced in last year?

How is the Crypto Market Performing?

The crypto market is swinging from left to right, comfortable in limited range and smooth curves. The FTX fallout in the year 2022 shook the market and turned it downside. This year gave a fresh and positive perspective to major cryptocurrencies like Ethereum and Bitcoin, which gradually turned green helped by the relaxed macroeconomic situation of macroeconomic and cooling inflation. 

Nevertheless, the market sentiments have slowly turned from fear to greed and then to neutral. This is the nature of the crypto market which is highly volatile and unpredictable. The cryptocurrencies were showing a sign of stability last month but due to the U.S. inflation and its impact on liquidity.

The U.S. Federal Reserve’s stance on interest rate hikes has moved the crypto market upside down. Bitcoin crossed the level of $31,000 in July 2023 and is again at a low in August 2023 at $27,000 but has shown immense recovery in October at the level of $34,495. This has left the crypto investors confused and nervous. 

The current volume in the digital crypto market stands at $41.21 billion. However, if we talk about the world’s largest cryptocurrencies, Bitcoin and Ethereum were at the top of the charts till last month and showing signs of recovery. As of October 31, 2023, Bitcoin is trading at $34,497 and Ethereum is trading at $1,808. 

Crypto experts believe that the current situation is tough and the recovery is long ahead. Most of the crypto are way behind their all-time highs. If we take Bitcoin it is still 50% down from its all-time high which was in November 2021 at $60,000 and Ethereum is currently at $1,800, an all-time high at $4,000 in the year 2021. 

The crypto market till now has no doubt positively responded to the global finance uncertainty and is still standing strong amid tightening credit situations with shaky bond market volatility. Crypto cannot sail alone, for a balanced atmosphere all other financial assets have to follow the same sentiments.

Is Investing in Cryptocurrency Safe?

The cryptocurrency market has seen the good side as well as the worst side of the market, be it post-Russia-Ukraine effects, Terra-Luna crash, FTX collapse or tightened tax regulation, it has witnessed roughest storms during the past few years. 

The year 2023 gave a fresh start to the crypto world, showing positive signs of recovery. Crypto investors believe that in situations like this, investing in stable digital currencies like Bitcoin and Ethereum in SIP format is a safe choice. Crypto experts consider that in the overall portfolio, investors should just look at investing just the 5% exposure to cryptocurrencies. The most important part is to invest only a miniscule amount and not all your life savings as the market is highly volatile and there are chances of you losing it all. 

Steps On How To Invest In Indian Cryptocurrency Market

Step 1: Select a cryptocurrency: Choose a cryptocurrency you wish to invest in. Like any other asset class, crypto has its own fundamentals and different blockchain networks back them, intrinsic value and mining techniques. Make sure that you research and analyze before investing as the crypto market is highly volatile.

Step 2: Select a crypto exchange: After you made up your mind about a cryptocurrency it’s time for you to find a perfect crypto exchange platform for yourself. It is a necessity to have a functional account in a crypto exchange which will help you to buy and sell cryptocurrencies. Check out our article on the best cryptocurrency exchanges in India.

Step 3: KYC: Once you select a crypto exchange you need to register yourself by providing personal details like name and address and complete the entire KYC formalities. After setting up your account you’re ready to invest in cryptocurrency. 

Step 4: Choose payment mode: For buying a cryptocurrency you need to select a payment option that you find comfortable. You can choose peer-to-peer, bank transfer, online payment mode or a crypto wallet.

Step 5: Purchase cryptocurrency: After adding the funds to your account you can smoothly buy your selected cryptocurrency. All you have to do is press on the “buy” tab and you can easily buy the cryptocurrency of your choice.

Step 6: Storage: After you purchase the crypto coins, don’t forget to store your currencies securely because they are not regulated and you must keep them safe as there’s always a risk of hacking or theft. You can check out the crypto storage options from here.

Step 7: Selling cryptocurrency: This is as important as buying as this helps you make money out of investing. You can sell the cryptocurrency the same way you purchased it, just click on the tab “sell” in your portfolio. You can fully or partially sell your crypto investment based on your choice but don’t forget to timely book your profits. 

Bottom Line

It is a wise choice to observe the crypto market prudently with the uncertain environment and slow recovery of macroeconomic situations in the world. Do not make any reckless decisions as it is a good time to observe the market closely and analyze it. 

One may never know, but the observation will eventually help the investors to make smart decisions and might have a favorite digital asset at a fair value, once the chaos situation fizzes out completely. 

Read More:Why Is The Crypto Market Down In January 2024?