Crypto markets have been trending lower for over a year now, and a long period of low volatility could be about to begin, an analyst says.
However, others felt there could be a quick turnaround once the macroeconomic picture improves.
On December 18, crypto analyst “Cold Blooded Shiller” compared the current market to that of the last bear cycle in 2018/19. After the period of rapid declines, the markets entered a lull of sideways trading and very low volatility for about 18 months.
The analyst suggested that could happen again with the crypto winter extending into 2024 if the story rhymes.
Looks pretty similar atm, volatility, this region is selling off to new lows, beginning to slow down in volatility for the next 12 months. pic.twitter.com/nzeBMVtjvC
— Cold Blooded Shiller (@ColdBloodShill) December 18, 2022
However, there are alternative views that predict a faster recovery in the crypto markets. DeFi analyst ‘Kamikaz_ETH’ said comparing the markets to those before ‘DeFi Summer’ does not make sense.
“There will be no extended 1-2 year crypto winter – a few months max depending on how fast the macro melts,”
They added that every mainstream financial company is gearing up to offer crypto services, and crypto now has a lot of real-world use cases, most of which are based on Ethereum.
“2020/2021 was not the third round of crypto – it was the first round of crypto based on real working use cases,” they added.
Use cases aside, a bigger factor influencing the crypto markets is the macroeconomic situation. Retail investors are unlikely to return until they have cash available to do so. This is unlikely to happen until inflation is brought under control and energy, utility and household bills return to reasonable levels.
Most of next year will likely be a continuation of current market moves, with no real breakout. The final flush seems to have happened, with markets falling 73% from peak to peak, but that doesn’t necessarily mean there won’t be another panic sell.
Crypto Market Outlook
Markets were stable over the weekend with very little activity. Total capitalization was $840 billion in Monday morning’s Asian trading session – very close to the bottom of the cycle last month.
BTC had fallen to $16,663, while Ethereum was also in the red at $1,177 at the time of writing, according to CoinGecko.
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