The year 2022 opened with a tiny drop in the price of major cryptocurrencies, which then turned into a larger drop soon after, which only recently stopped.
It was clear that we were seeing quite a severe crypto winter, as many hundreds of millions of dollars were wiped off the overall crypto market value. All cryptocurrencies have gone into the red, investors have lost large sums of money, and in this same period, the scrutiny of regulators has increased.
Arguably, 2022, or at least most of this year, hasn’t been one of the best for the cryptocurrency market. Especially if we compare with the previous two years, which had seen a significant rise, and although there were serious falls, the recoveries were much greater.
It is to be expected that a winter in cryptocurrencies will not last forever, the cryptocurrency market is quite changeable, and the situation is different almost every day. That is why, after the storm, some say that the calm will come, and for them, this calm is already there.
After a winter as severe as the one we have experienced in recent months, various market analysts claim that it is ending, and that a much more fruitful spring for the market will be ushered in.
Is the crypto winter really over?
It may be too early to tell whether or not the crypto winter is over, at least for now. Although such large market declines are usually followed by considerable growth, judging by how cryptocurrencies have performed in the past, this does not mean that the crypto winter is over.
There is no denying that conditions have been a little more favorable for cryptocurrencies in recent days. And on that note, some analysts are postulating that this could be a short-term move that won’t represent sustained growth in the medium to long term, which postulates that winter isn’t really over.
To understand this theory a little, it is necessary to go back in time. Last year, more precisely at the beginning of November, the price of bitcoin broke above $65,000, and managed to touch $69,000, its highest level in cryptocurrency history. Now, nearly a year later, bitcoin’s price is a far cry from the peak it hit a year ago.
Without going too far back, last July the price of bitcoin fell below the $20,000 mark, plunging into turmoil the market and all investors who had not liquidated their positions. While bitcoin’s price managed to rally a bit, it didn’t quite manage to cross the $25,000 threshold.
Indeed, at the time of this publication, the cryptocurrency sits at $19,335.23. It is therefore clear that the situation in July, which was one of the most worrying of the year, is repeating itself, leaving us with an unclear sign of recovery.
Are new falls looming on the horizon?
What happens in the market not only affects bitcoin, but also all cryptocurrencies, such asEthereum, which is the second largest cryptocurrency in the market. If we look at its levels throughout the year, from January 2022 to date, it has lost around 59% of its initial value.
This has been repeated in countless cryptocurrencies, which does not leave investors and regulators indifferent. Also, if we look at the most recent levels of bitcoin, which is the main cryptocurrency, we realize that winter is probably still here, because a fall as severe as this year’s will not be retrieved so easily.
Furthermore, various analysts have indicated that the market may still suffer a little more. It is likely that we will soon see further falls and a somewhat bloodier period for cryptocurrencies.
A floor has not yet been set, but it is known that if the price of bitcoin drops further, the fall will be virtually uncontrollable. But the hope of a recovery is never lost, or at least the possibility that bitcoin’s price will stay at a stable and safe level that doesn’t put investors at risk.
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Is the crypto winter over or are further falls on the horizon?
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