Why Is The Crypto Market Down In September 2023?

For the majority of cryptocurrencies, the year 2023 has begun on a positive note. After suffering during the past year, the majority of tokens have begun to recover. In contrast to their all-time highs, which were reached during the bull run of 2021, prices are still substantially lower than they were then. 

So how does the second half of 2023 look? Will it be a year of sluggish development, or will the cryptocurrency market be able to reach new heights and recoup all of the losses experienced in 2022?

What’s Happening in Crypto Market?

The entire crypto market is comfortable in smooth contours and limited range, swaying from side to side. After the FTX collapse in 2022, confidence in such currencies was shattered, and the market turned completely bearish with no indications of reversal. Nonetheless, 2023 opened a new door for major digital currencies such as Bitcoin and Ethereum, and the crypto market has begun to progressively turn green due to the relaxed macroeconomic environment and easing inflation.

However, market sentiment has shifted from "fear" to "greed" to "neutral" This is inherent to the cryptocurrency market, which is highly volatile and subject to sudden shifts. The cryptocurrency market, which exhibited a degree of stability and steadiness last month, is once again exhibiting nervousness as markets are extremely anxious about the impact of U.S. rate increases on liquidity. 

The largest cryptocurrency by market capitalization was trading for $29,150 at the time of writing, according to CoinMarketCap, a 1% 24-hour decline.

The U.S. Federal Reserve's position on interest rate hikes is the single most significant factor influencing the price of Bitcoin and the broader crypto markets. After surpassing the $31,000 threshold, Bitcoin is now trading within a narrow range as investors become increasingly anxious. 

At the moment of this writing, the current volume of the digital market stands at $1.18 trillion. However, if we consider the world's two largest currencies, BTC and ETH, which were obviously at the top of the charts until last month, there are currently few signs of a recovery. At the time of writing, Bitcoin is trading at $29,150 and Ethereum is fluctuating around $1,850, registering a drop of 1%. 

According to crypto experts, the current situation is challenging and the path to recovery is lengthy. As the majority of currencies continue to lag significantly behind their all-time highs. Similarly, Ethereum, which is currently trading at $1,800, reached its all-time high of $4,000 in 2021. Bitcoin is still more than 50 percent below its all-time high of $69,000, which it reached in November 2021. 

The crypto market has responded positively to global financial uncertainty and has been able to withstand tightening credit conditions and shaky bond market volatility up to this point. However, since crypto cannot sail alone in this boat, all other financial assets must follow the same sentiment for a balanced environment.

Reasons Behind Crypto Collapse In 2022

In 2022, cryptocurrencies, which are notorious for their extreme volatility, experienced a period of turmoil. The primary cause of the market decline is the failure of FTX, one of the world's largest cryptocurrency exchanges. The insolvency of FTX and its dispute with Binance have not only caused a massive market sell-off, but have also reduced the liquidity of the cryptocurrency market.

Binance, the largest cryptocurrency exchange platform in the world, was poised to acquire rival FTX, but quickly backed out of the deal, citing FTX's financial difficulties and regulatory investigations. Binance's decision astonished crypto investors, causing Bitcoin's price to plummet to a two-year low of $69,000 in November 2021. 

These unexpected turns of events precipitated a crisis-like situation in the crypto industry, resulting in a high level of investor mistrust and skepticism towards centralized crypto institutions and on the regulation front. 

Several concerns have been raised about the survival of other trading and lending firms, such as Gemini and Coinbase, due to the FTX contagion effect. According to experts, their survival is contingent upon their regulatory, governance, and managerial practices.The rising interest rates and recent hawkish tone of the U.S. Federal Reserve's tighter monetary policy have also added fuel to the fire, in addition to the FTX's abrupt collapse and its subsequent contagion effect.

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Is It Safe To Invest In Cryptocurrency Right Now?

The cryptocurrency industry has weathered greater storms in recent years, including the Terra-Luna catastrophe, fallout from the Russia-Ukraine war, stricter tax rules, and the FTX collapse. 

After a rough 2018, the cryptocurrency market got a new lease on life in 2023, and things looked up. 

Experts in the cryptocurrency market say that in this case, seasoned investors should consider using a systematic investment plan (SIP) to buy Bitcoin or Ethereum, two digital coins that are widely regarded as reliable and firm. Virtual currencies should not account for more than 5% of a diversified portfolio. 

Be aware that cryptocurrency values are extremely unpredictable and speculative, and only invest a little amount that you can afford to lose.

Step-by-Step Guide On How To Invest In Indian Cryptocurrency Market

Select A Crypto Currency: Choose a cryptocurrency in which to invest. As with any other asset class, each cryptocurrency has its own intrinsic value, blockchain networks, and mining methods. As cryptocurrencies are extremely volatile, it is crucial to do your research well and then determine how much money is to be put in that specific cryptocurrency.

Select A Cryptocurrency Exchange:You must have a functional account at a cryptocurrency exchange in order to purchase cryptocurrency.A cryptocurrency exchange is an online trading platform that facilitates the purchase and sale of crypto currencies. Read our article "Compare Crypto Exchanges in India" for information on exchanges and to learn about the top cryptocurrency exchanges in India. 

After selecting a cryptocurrency exchange, you must register by supplying your name, address, and completing KYC procedures. The platform then gives you a deposit address. After acquiring this knowledge, you are prepared to invest.

Choose Your Comfortable Payment Mode: Once you have selected the cryptocurrency exchange of your choice, make sure that you also select the most viable online payment mode such as credit/debit cards or instant bank transfers, peer-to-peer options (P2P), or even a crypto wallet. You need to add funds to your payment gateway in order to purchase a crypto coin.

Purchase Cryptocurrency: After adding the funds, now you can easily purchase your selected cryptocurrency. After logging the crypto platform along with added funds, you will have to select your chosen crypto coin from the various currencies, which will be shown against their current market price, total volume, exchange symbol and other relevant market information. You need to click on the “buy” tab which will help you to make a purchase of your selected cryptocurrency.

Also read :- Bitcoin Mining: What Is It & How Does It Work?

Store you Crypto Securely: Once you have received crypto coins in exchange for fiat currency, be sure to store them in a secure manner. Keep in mind that cryptocurrencies are not supported by any regulated entity, so it is crucial to secure them properly as they are always susceptible to theft or hacking. 

While almost all exchanges provide online wallet options, some investors favor cold storage, which enables offline coin storage. As they are not connected to the internet, cold wallets are regarded as one of the secure ways to store cryptocurrencies. 

“Sell” On Time: This is a crucial phase that ultimately allows you to profit from any cryptocurrency investment.In the same way that you placed an order to "buy" cryptocurrency, you can sell it by selecting the "sell" tab that will be displayed in your portfolio. Additionally, the investor has the option to sell their investment in whole or in part based on their own discretion. It is crucial to record your earnings promptly.

Bottom Line

There is a need for cautious market observation in light of the recent volatility and the delayed recovery of global macroeconomic situations. Right now is a great moment to keep a cool head and analyze the bitcoin market's finer details rather than making any hasty or rash moves. 

The crypto market is currently in disarray, but as things settle down, investors may be able to snag their preferred digital assets at much more reasonable prices.