Is The Bitcoin Price Downturn Finally Finished?
For many, the last few days have been a much needed relief after months of nothing but seemingly red days. Ethereum led the charge by moving over $1,600, and bitcoin passed $23k. The mood in the market has begun to shift from that of pure hopelessness that we were destined for a lengthy bear market. Now shifting to a mindset that maybe, just maybe we are moving back upwards, with the market potentially turning bullish again.
But is the market downturn over? No one knows the answer for sure, and anyone who does is simply lying to you. With that said, we can go over what caused this upwards movement, things coming up on the horizon, and also lingering factors that will all determine if this bullish movement will be a prolonged movement, or simply just a fake-out move.
Let's first talk about what caused this movement upwards. Just a few days ago, the ethereum developers finally announced a hopeful ETH merge date that will unite the ETH blockchains into 1 proof-of-stake chain. This has been a protocol upgrade that has been in development literally more than half a decade. Being delayed so often that many in the market debated if the merge would ever come. While it is just the first step in the whole ETH 2.0 upgrade, it is arguably the most difficult to achieve as well. After the developers announced the upgrade day, ETH's price shot up like a rocket, and other altcoins joined in on the upwards movement. Bitcoin lagged behind, but eventually began moving up as well. Just as I had been predicting for several months, during the doom and gloom of the market, when we were wondering what the next upwards catalyst could be. So far, the news of ETH's upgrade has propelled the market. The upgrade will be taking place in September, and I believe that the hype will continue to grow even more as the day approaches. Which will propel the market even further. This very well could be the factor that re-ignites a bull market for crypto. Or at the very least, helps coins to recover significantly recover from the losses they have been receiving lately. After the merge does take place, there could be a sell-the-news event, which would cause prices to dip. But in my opinion that will be short-lived. After the ETH merge takes place, the inflation rate of ethereum will be drastically cut to even lower than bitcoin's inflation rate. A factor that will eventually pump the price of ETH, and most likely the entire market with it.
Now moving on to the macro portion of the article. Inflation is currently at record numbers, with prices of goods increasing as well. But, there is beginning to be hope that perhaps inflation has finally topped out. In the past few weeks the price of oil has begun to drop. The US has increased interest rates which cause initial pain to the markets, but overall will help fight against inflation. The next time that the inflation numbers are released to the public, if there is a decrease, that could be an extremely bullish time for the market. All the participants sitting on the sidelines waiting to invest; would all jump in. It would be a sign that it is okay to begin investing into risk assets, such as bitcoin and ethereum again. If that were to happen, we would see a huge jump in the prices of our coins. Seeing bitcoin over $30k and ETH over $2,500 relatively soon isn't out of the question. However, if the next inflation numbers continue to move even higher, that would cause even more pain for the market, and causing even more sell off. That bearish news and sentiment could cause bitcoin and ethereum to make lower lows. Potentially in the $14k and $700 range respectively.
I'm sure we are all tired of hearing about macro factors outside of bitcoin and ethereum causing its price movement, but that is how the world is operating right now. We are truly living in unprecedented times. Another macro factor affecting everything continues to be the Russia/Ukraine war. Which has had a giant effect on inflation numbers, food and oil supplies, and also causing fear in the market. Just recently, there have been rumors of renewed peace talks starting again between the two nations. Naturally this would be a hugely bullish event for markets if that were to happen. Essentially restarting the bull market. However, if things escalate, it would cause even more pain for markets.
And finally, there is one last factor that I believe will be a bullish thing for bitcoin and crypto in general. It appears that the market selloff and contagion caused by Luna/UST, 3AC, Celsius, Voyager and more could finally be finished. While many of those companies will be gone forever and the funds may never be recovered by its users and lenders. The fact is that the forced liquidations and build spot-selling by these organizations is finished. With all of this happening, and bitcoin still remaining in the neighborhood of $20k is pretty incredible in my opinion. Now that this large selling has come to an end, there just aren't that many people left who are wanting to sell. Everyone who would sell, has already sold and ownership has been transferred to those with stronger conviction. This along with the factors above should continue to help crypto prices recover.
So is the bearish season over? I wouldn't go that far, but for the first time in quite a while, I am finally beginning to feel bullish again. The light at the end of the tunnel is finally approaching. Those of us who survived the deep red price drops, who were able to protect our funds from being on services that eventually froze all transactions, and those of us who continued accumulating. Those of us who managed to do all of those things will be greatly rewarded in the future. The price could go up or down from here, but I have strong confidence where it will be in ten years. I remain very bullish, and I continue to accumulate.
How about you? Do you think the bitcoin and crypto price downturn is finally over? Are you bullish or bearish?
As always, thank you for reading!
Hopefully so. But from what I understand it will go down again in the next month or so. But let's see.