Crypto Crush - What Lessons Can Traders Learn?

Berry Mathew

Crypto Crush – What Lessons Can Traders Learn?


The crypto market has experienced so much tussle in 2022. The bear season that dominated the year has exposed the vulnerability of many crypto projects as well as the Centralized crypto exchanges. Traders have witnessed many crypto projects crash.  Several crypto exchanges too have crashed with investors’ funds in them. The most remarkable amongst them is the crash of the second largest crypto exchange in the world known as FTX exchange, which was declared bankrupt by its founder Sam Bankman-Fried. Over $200 Billion of investors’ funds deposited with this exchange is yet to be recovered today. Traders using this exchange for trading have been denied access to their funds.  This was to be followed by another large crypto exchange – AAX suspending withdrawal requests on its platform for the past fifteen days citing glitches on its network and lack of funds to pay investors as the major reason for halting the withdrawal requests. 

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Devastated by these irreparable losses, investors have been pushed into the streets wailing over their losses. What lessons therefore, must crypto traders learn from this series of crypto crushes witnessed this year? Is it still advisable for crypto traders to still buy Cardano and other Cryptocurrencies from Centralized crypto exchanges? We have discussed these important questions in this work to guide traders in making decisions. 

Is the crypto market coming to an end amidst the great Crush? 

The fact that the price of Bitcoin and other Cryptocurrencies have been down up to the last month of the year 2022, has got many investors asking if the crypto market is about to come to an end soon. Will the prices of various cryptocurrencies recover again or is this the end of crypto? 

Traders who raise these questions have not been used to the crypto bear season. Age-long crypto traders understand that the market is only completing its important cycle known as crypto winter or bear season. This period is usually characterized by a massive fall in the prices of various digital assets and could last more than a year depending on the factors that triggered it. 

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Investors are still optimistic that the market will recover again for the next bull run once the current bear season is over. 

What lessons can traders learn from the Crypto crush in 2022?

The series of crush witnessed in the crypto market during the bear season in 2022 have awakened many crypto traders to realize the numerous risks they are exposed to today while trading crypto using Centralized crypto exchanges. The crash of the second largest crypto exchange – FTX stands to warn traders that their funds are not safe while using any of the centralized crypto exchanges. Thus, there is no way of recovering their funds should the exchange crash in the future.

Next, the crash of the Luna project as well as the FTT token will always remind investors to be careful in the amount they invest in Crypto as there is hardly any capital protection should the project crash for any reason. 

Above all, investors will need to learn from the massive cramp down in Crypto prices this year that the crypto market operates in two seasons such as the bearish and bullish seasons. This will also guide beginners to know when to buy and sell their crypto holdings. 

What is the best time to invest in cryptocurrency?

The bear season has often provided a good investment opportunity for new traders to come into the market. Often, investors try to identify the bottom during the bear season as the best time for making their long-term investments.