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Crypto market has been completely disastrous with few exceptional cases so far in 2022. The prices of the top crypto assets, BTC & ETH, plunged 80% in prices. Now the situation is turning. Is the crypto bull market coming back?
Last updated Aug 12, 2022 at 7:17 PM
Posted Aug 12, 2022 at 6:00 PM
We will walk through several factors and important developments in the crypto market that may bring back the golden old days of crypto assets.
In July, traders began to feel some relief from the prolonged crypto bearishness, but plenty of high-profile bankruptcies indicate that we might not be out of this bearish cycle yet. However, the main cryptocurrencies like Bitcoin (BTC), Ethereum (ETH), and others have recovered from their July 2022 lows despite persistent fear about inflation and increasing interest rates.
Risk assets, stocks, tech firms, and cryptocurrencies surged in the final week of July because the Federal Reserve of the US made bullish remarks. When the Federal Open Market Committee of the United States increased its objective for the federal interest rate by 75 basis points to counter forty-year high inflation, the price of cryptocurrencies increased. Let’s analyze the crypto performance in the last month.
Crypto Bull Market: Crypto Performance In July
The crypto market improved in July after a disappointing result in June. In July, the price of the flagship increased by 20%, the greatest gain since October 2020. As of August, the price of Bitcoin is just above $24,000 , up from $17,708 in June.
In July, the price of Ethereum increased by 58%. The “dying” coin is in fact still alive. Ahead of switching from a proof of work consensus process to a more energy-efficient proof of stake approach in September, the top cryptocurrency is now trading above $1,800 per unit price. Bitcoin prices are still down 49% to date this year despite the current bounce, while Ethereum prices are down 53%.
Tesla Balance Sheet
Tesla, Elon Musk’s electric car company, was one of many factors pushing down the prices of the BTC in the second quarter. Early in 2021, Tesla invested $1.5 billion in Bitcoin, but it recently revealed that it has sold over 75% of its BTC assets. The value of the whole cryptocurrency market on a global scale is once again $1.1 trillion. Despite this, the total market valuation of all cryptocurrencies has fallen significantly from its peak of about $3 trillion in November 2021.
Investors with a positive attitude believe that the bankruptcy of Celsius, Voyager, and other struggling crypto companies is signaling the end of the crypto market bearish cycle and the start of a new crypto bullish market. The most intensive stage of the bearish cycle for the crypto market "appears to be ending," according to JPMorgan Chase analysts. He [who? if “analysts”, plural, use “they”] also claims that ordinary traders and investors have been pushing the prices of Bitcoin and Ethereum.
Small investors are playing a vital role in pushing prices. Although the week started with a lot of pressure due to the Federal Reserve decision, we are hopeful that the crypto market will return to its bullish movement soon. Perhaps this apparent show of confidence reflects the belief among investors that more aggressive action was expected from the Federal Reserve. The shrinking interest rate was another factor to boost the confidence of the traders in the overall market.
The announcement of the SEC chairman that the primary digital asset, BTC, is a commodity can encourage many traders and investors. But at the same time the SEC decision to treat many other assets as securities can cancel out the positive impact. The month of August may bring back the crypto bull market because the chances of an interest hike are too low.
The return of the crypto bull market is tied to several factors like the actions of the SEC against digital assets, and many others. The difference in viewpoints between senior investors and the younger generation might be attributed to the fact that the crypto market has been a sanctuary for speculators. The market remains unpredictable and volatile.
Regardless of which narrative you support, make sure to conduct proper research to see whether such a risky investment aligns with your goals and risk tolerance.