Will Crypto Recover? When to Expect a Bull Run
Will the crypto market recover after crashing down in 2022? This article addresses the crucial topic that most people want to know. We also discuss when to expect bull-run crypto again. Let's start our analysis! The current digital currencies crypto market situation is exactly the opposite of what heights it reached in 2021. Bitcoin lost more than 60% of its price value from last year. Meanwhile, Ethereum, Binance Coin, Litecoin, Cardano, Doge, and others are red.
Besides, the Terra Luna crash has left a dreadful impact on the global crypto market. As a rising coin, Luna has flattened, and the stablecoin, UST, lost its peg. It has shaken the investor's trust in the crypto market. Overall, the crypto market is in a tailspin, with everyone having the same existential question: will crypto recover anytime soon?
To clarify the doubts, here are some insights into current crypto trends.
Why is the Crypto Market Down Today?
Several social factors have influenced the recent crisis in the crypto market. Last year, it was Tesla’s pull-out from accepting payments in Bitcoins and China’s sanctions on crypto. But today, it is because of the Russia-Ukraine war and the looming fear of global inflation. Moreover, the debacle of the Terra Luna blockchain has also played its part in this downward trend.
Last year, despite the two happenings, various cryptocurrencies saw their all-time highs. But today, it isn't the case, as the investors' confidence in the market has sunk. Luna's crash resulted in the de-pegging of the stablecoin TerraUSD (UST), which was considered a safe bet for trading.
Besides, the fear of recession has kept people from investing in digital assets. The inflation in the UK has reached a 40-year high rate of 9% and is expected to be 10% in the coming months. Fuel and gas prices are also surging worldwide. In this scenario, people are more inclined to keep liquid assets or other risk-free assets.
When Will the Crypto Market Go Bull Run?
The crypto predictions today depict quite a gloomy picture of the market. But, the one thing we can learn from the previous crypto market crashes is that they always result in some innovations in crypto and are part of the cleansing process of the market.
The cleansing of the system usually happens when it hits bottom. So, the question should not be ‘will crypto recover?’ Instead, it should be ‘when will crypto bull run again?’ To figure it out, you must watch Bitcoin closely, as its value directly affects other altcoins.
As of May 27, Bitcoin stands at $29,007.14 and is down by 2.25%. Since the start of the year, it has lost around 60% of its value. Some analysts like Tony Nyman from Informa Global Markets suggest that Bitcoin might fall under the $20,000 mark.
On the other hand, another analyst, Michaël van de Poppe, hoped that if Bitcoin showed resistance at $29.4K, it might make gains and reach the $32.8K mark. But, it is quite unlikely as Bitcoin has already fallen that mark. According to some analysts, it might go down to as low as $8K by the end of 2022. Therefore, before we see a significant recovery, the crypto market will go through more bleeding to reach the bottom. Nevertheless, it is crucial to understand that the crypto market, like any other market, operates on the supply-demand, and its recovery will depend on it.
Road Towards Sustainable Stability
The previous crypto market crashes show that there can be an increase in market capitalisation after the continuous downward trend. In addition, for the system’s stability, there is room for certain technological innovations that can overcome the existing drawbacks of the system.
For instance, the January 2018 crypto crash resulted in shaping the DeFi system in the crypto world. In the same way, the current market crash can help us establish a secure blockchain for stable coins, which will resolve the issue of high volatility in the market.
It is exactly what the Chief Marketing Officer of Coinbase, Kate Rouch, has pointed out in a recent blog.
So, as we observed the failure of a stable coin, the current downward trend might bring up better and more secure projects. Moreover, when the market hits bottom, it can naturally wipe out the Ponzi scheme-based projects that run on faulty algorithms.
A market collapse is also a good reminder for crypto investors to educate themselves about the current trends and make informed decisions. As an investor in the current crypto winter, you should take a step backwards and study the blockchain systems before investing money in any.
After all, it gives you another crucial lesson not putting all your eggs in one basket. You must not risk all your life investments on one single token. Instead, it is better to accumulate and trade side by side.
Author: Wasay Ali
Wasay Ali is a versatile professional writer with global experience and a background in mechanical engineering and social science. He is adept at crafting news and informational content for the crypto space and has experience writing for other niches. He is a professional SEO content writer who has worked with several digital marketing agencies and clients in the US, UK, Pakistan, and Europe. He is a dedicated volunteer and enjoys reading, writing, poetry, and going to the gym. He is an INFJ-A personality type dedicated to positively impacting the world. Wasay has a passion for writing as it allows him to express his creativity, share his knowledge, and connect with people worldwide.