The principle of “buying the fall” is based on the assumption that price falls are temporary aberrations that correct themselves over time. Fall buyers expect to take advantage of declines by buying at a relative discount and reaping the rewards when prices rise again. Although bitcoin has seen a slight uptick, several experts say the cryptocurrency market may not have hit rock bottom yet. The fall in cryptocurrency prices will depend on “whether the stock market bottomed out and if no major cryptocurrency company goes into liquidation,” according to Edward Moya, senior market analyst at Oanda.
Bitcoin supporters see it as a diversifier in balanced portfolios, but it didn't do better than stocks at the start of the coronavirus pandemic. This is because investors sold everything out of panic. The exchange said it hasn't been harmed by cryptocurrency companies seeking protection against bankruptcy. Therefore, cryptocurrency prices are usually quoted in dollars, most crypto transactions involve stable currencies linked to dollars, and stable currencies linked to the dollar are widely used as secure collateral for cryptocurrency loans.
The crypto ecosystem has firmly adhered to the traditional financial system, and the dollar dominates cryptocurrency markets just as it does with traditional financial markets. Several high-profile cryptocurrency companies, including hedge fund Three Arrows Capital and crypto lender Celsius, have since declared that time, China has ordered the complete shutdown of Bitcoin mining in its Sichuan province and has told banks to stop supporting crypto transactions, in a latest wave of restrictions on cryptocurrencies that have caused a fall in prices. The co-founder of the automated cryptocurrency trading platform Coinrule, Oleg Giberstein, believes that cryptocurrencies are suffering the same tensions as other parts of the economy, leading to falling prices. If the price of bitcoin stabilizes in the next two weeks, the protracted bear market for cryptocurrencies, also known as the crypto winter, could end as quickly as it began.
That's according to Edward Moya, senior market analyst at brokerage firm Oanda, who says that “Wall Street enjoys a positive risk attitude, which is good news for cryptocurrencies. Cryptocurrency prices are rising as investors begin to feel more optimistic about the cryptocurrency market, thanks in part to the recent uptick in U.S. stock markets.