After the collapse of FTX, two months of FUD, and a cryptosphere on the defensive, the bear market may end sooner than expected. Will we soon witness the end of the bearmarket?
A well-known crypto winter
The cryptocurrency market is on a downtrend for over a year now. And according to some analysts, a period of lower volatility would start soon. For others, we could see a rapid reversal of the situation as soon as the global macroeconomy improves.
Yesterday, cryptocurrency analyst “Cold Blooded Shiller” shared with us a comparison of the current market state to that of the down cycle in 2018/2019. After a rapid and devastating bearish period, the market entered a state of calm with little trading and a volatility at its lowest pendant 1 year and a half.
The analyst suggests that we could see a similar scenario during the current cycle. The bear market would extend into 2024 if the scenario repeats itself.
In a series of tweetsCold Blooded Shiller explique :
Seems pretty similar atm, volatility, sell off from this region to fresh lows, start the volatility slowdown for the next 12 months.
The picture looks pretty similar right now: volatility, selling off from this zone to new lows, beginning to slow down in volatility for the next 12 months.
Seems pretty similar atm, volatility, sell off from this region to fresh lows, start the volatility slowdown for the next 12 months. pic.twitter.com/nzeBMVtjvC
— Cold Blooded Shiller (@ColdBloodShill) December 18, 2022
Is a rapid market recovery still possible?
Currently, other analysts believe that a potential reversal Steps is very close. A specialist analyst crypto DeFiKamikaz_ETH, explained that making a comparison between current markets to those before “DeFi summer” doesn’t make sense.
There will be no extended 1-2 year crypto winter – a couple months tops depending on how fast macro bottom.
There will be no prolonged multi-year winter on cryptos. It will be several months at most, compared to how quickly the macroeconomy stabilizes and builds its bottom.
According to him, all traditional financial companies are preparing to offer services based on digital assets. Cryptocurrency now has endless use cases implemented in the real world. By the way many of them are based on the ETH of Ethereum. In a tweet, he explains:
2020/2021 was not the third crypto cycle – it was the first crypto cycle based on actual functional use cases.
The year 2020/2021 was not the number 3 cycle of cryptos, but the first cycle based on real cases of functional use.
There will be no extended 1-2 year crypto winter – a couple months tops depending on how fast macro bottoms
Every tradfi firm is preparing to offer crypto services
Crypto has real use cases, almost all of which are based on Ethereum
Comparing to pre-DeFi summer is meaningless https://t.co/vG1uTSvaV5
kamikaz ΞTH 🦇🔊 (@kamikaz_ETH) December 18, 2022
Leaving aside the use cases, the situation macroeconomic is the most important factors among those that influence the cryptocurrency markets. It is unlikely that individuals will start investing again until they have the cash to do so. They won’t find that cash again until inflation is brought under control and bills come down to normal levels.
Next year will probably be marked by a continuation of the market dynamics, without any real new collapse. The phase of panic and extreme fear seems to have already passed, with the markets having dropped 73% between the current top and bottom. Nevertheless, this does not necessarily prove that there will be no new panic movements.
The latest market movements
The crypto market remained fairly stable over the weekend, with low activity and little movement. The capitalization package amounted to 839 billion dollars during the asian session this morning, which is relatively close to the bottom seen in last month’s cycle. Right now, BTC is stabilizing around $16,700 while the second crypto on the market, Ethereum, is trading around $1,180.
In the same theme, find out why Bitcoin is falling back below $17,000:
