Crypto General Economic Overview

 Hello guys welcome to the new blog where i will be presenting my views on the recent crypto crash which happened last 5 months. The market was overbought during the pandemic , thus leading to a huge bubble which was going to burst anytime and the trigger was alarmed when the Feds announced that they would be rasing interest interated. For those of you who do not know economics let me give a simple insight. So basically when the pandemc occured the Feds(US Central bank) had to lower down the interest rates as that would encourage the people to borrow more money, which would let people spend thus helping businesses survive and grow. When the interest rates are lowerred,the dollar weakens and thus institutional investors look to invest their money in other asset classes and safe haven currencies( Swiss Franc, Japanese Yen) and that is where crypto was very predominent in terms and investing and the returns which bitcoins and other altcoins gave where amazing. One downside of lowering interest rates is (not particularly a downside) with people buying more and more goods( basic rule of economics-when there is less supply and more demand prices if goods increases and thats what leads to inflation). United States in the recent times has seen one of the highest rates of inflation with the rate touching upto 6.7%.  The journalists were criticizing th Feds iand the goverment for terms of mismanagement but the goverment stood with the viewpoint that more money needs to be supplied into the economy as to promote spending. But in Decemeber 2021, the Feds announced that they would start tapering( would buy less assets from the goverment)  and hike the interests rate as to curb the rising inflation. With less inflation and increased interest rates, the dollar starts strength and thus causing shockwaves to all the markets( US Equities, Indian stock ,Gold and  Crypto) and this is why the markets were bleeding overall. 

With the recent legalization of crypto in India(the 30 % tax on crypto is one of the bad viewpoints)  the markets have seen optimism but please note not the start a of a bull run.No one knows exactly when will the bull run start. No one knows when will a proper bull run start and to be honest no one can predict where is the market headed. People will make forecasts with technical analysis but i dont think crypto will follow/respect technical analysis . The market moves fundamentally and fundamentels play a major role  in deciding where will the market move next. The market is heavily corerelated with the price of Bitcoin- if Bitcoin has a bull run all the other alt coins will have a bull run, when Bitcoin has a bear run all the other coins will have a bear run. Thank you for reading..