Are We in The Crypto Winter?

So, the crypto markets have experienced a pretty solid rebound this week, bringing Bitcoin back over $21,000 for a brief moment and the overall crypto market cap back at over $1 trillion. While there's still several different reasons that have caused this market rally, there's a general consensus on the primary driver for the price action we're getting right now, and we're going to be explaining exactly what that is. It's going to help us also answer the question whether or not the bottom for the crypto market is in, and whether or not we may experience another bull market rally soon.

The S&P 500, the Nasdaq, the Dow Jones are all up this past week. the crypto market cap did fall under that $1 trillion level once again, but for the past week, if we take a look at the gain so far, bitcoin's well above $20,000. Ethereum is still above $1,500 and Ethereum was even at one point up over 20%. So right now, it's still holding about 17% gains in the last week. In addition to that, we'll have other altcoins within the market that have been doing pretty decent. Claymore is up 97% Dogecoin is still up 27% Toncoin up 23%, and we're having a lot greener across the board. The current rally in Bitcoin and all the other major cryptocurrencies right now are indicating that we're seeing an increase in market confidence following several key developments.

Well, let's break that down. So, the key drivers for this price rally; number one is going to be a short squeeze. Around $1 billion in short positions were liquidated earlier this week, and we're going to talk a little bit more on that later, but that's going to be a huge catalyst in being able to drive the shorts out, which are positions that are trying to pull the market movement down. They're betting against the asset.

The second reason why we're seeing the market having a little bit more green action is that macro momentum from the economy is starting to turn a bit more into Bitcoin's favor. What this means is that the next FOMC meeting, is showing that many investors are confident that the federal government can now roll out smaller sized interest rate hikes. As long as we're seeing some recovery happening within the next 12 to 24 months, this is a great time for us to continue investing in the market and being able to spread out our deposits, where if the market does pick up and it happens a lot quicker than people anticipated, you'll be ready and you'll be able to capitalize on those gains, which is free money back in your pocket as long as you are able to realize those efforts that you've made while the markets have been low.

Last but not least, macroeconomics is looking for a little bit better, but we're going to get more confirmation within the market once we get solidified jobs reports and see where we are right now with inflation coming in the next few weeks. What we have right now is that we got more word that we have other countries who are now even more pro crypto and they're transitioning within the space. So, the UK is now on their third Prime Minister for this year, and the individual who's replacing Liz Truss right now is someone who's just been an advocate for crypto and with a high position like being a Prime Minister over a country just like this, we're now going to be seeing crypto further adopted in a lot of these different places which usually means news like this always helps the crypto markets too.

So, to answer the question that probably a lot of people have, which is, are we going to be in this bear market for another long period of time or can we see some better growth.

Right now, it looks like things are flipping in terms of sentiment at a considerable rate. Even most recently we had Charles Schwab, who's just one of the largest financial industries, some of the players within the game who came out with a survey, and it showed that nearly half of generation Z millennials want to see crypto become a part of their 401k retirement plan. And on top of that, to make things even a bit better for the crypto market, there's been a saying which is follow the smart money, follow the whales. We don't need to be exactly as smart as the whales knowing what they're going to be doing with their moves, but if we can get a little bit of the breadcrumbs that they're able to make, we should be in a pretty good position too.

Are you going to be fighting against smart money? Are you going to be fighting against the hedge funds and the large institutions that have made correct movements and they've been playing this game for a very long time? Or you going to try to go against the grain? I think for us it's just important to take a look at all the data, but to also realize where we are with us seeing a little bit of green within the market. Please don't get too caught up thinking that the bull run is now imminent. It is always good for us to see a bit more life coming. But at the same time, it is so important for us to know the trajectory of where we are within this market. Inflation is still not under control. If interest rates are slowing down, they are still moving up in this pace. And until we get inflation under control, I don't think we're going to be seeing this huge euphoric run that we've experienced within the past few. Also keep in mind, the last two years, one of the reasons why the market performed the way it did was just because of all the money that got printed. And we saw crazy, crazy times, crazy amounts of money being made. And I do believe that in this lifetime we're going to be experiencing that again. But right now, we're still coming off. The high of all that money that got printed. And I do think if we have a bear market, which we are in now, it should last for a lot longer than we currently experienced so far. But regardless, the important thing to do through these market times is to continue dollar cost averaging to continue putting more money into the market.