My Outlook on the Crypto Market
September is quickly coming to an end, which means we are fast approaching the end of the year as well. All of those ideas of what we thought were going to happen with Bitcoin, Ethereum, and the crypto market ended up showing us how little we know. Even for me, someone who has an unbreakable conviction in where the market is eventually heading. Has found this year to be difficult to stomach. While there were so many things that brought Bitcoin's price down that were out of its control. Things such as war, inflation panic, and other macro factors. There were also so many self-inflicted wounds in the crypto industry this year. You don't need to look any further than the Luna/UST, and crypto lending chaos that took place during the summer. People easily forget, but prices were beginning to rapidly recover before those took place. It's a year of "what could have been?" That is also the main theme of this last bull cycle as well. I firmly believe that prices didn't reach the heights they may have been destined to hit. The bull market was cut short due to countless macro factors and other FUD thrown in Bitcoin's and crypto's direction.
But all of that is in the past. We learn, move on and adjust our strategies. But what is the crypto outlook now at the end of September and in the short-term future? That is what we will be diving into today.
The Market Lull. More Pain Ahead?
Most of us probably follow crypto prices very closely on a daily basis. A higher percentage of us than we would like to admit, probably know what prices are constantly. Checking every few minutes. If you are one of these types of people, these last several months probably have been very stressful for you. It seems like we have been seeing constant downward price movements. Each time, prices appear to be finally moving back up, returning excitement to the market. The rug is pulled out from beneath us and prices tumble quickly. Small steps up, and elevator movements down.
When in doubt, just zoom out. If you do zoom out and look at prices, you will find that prices have been moving sideways since the initial chaos that ensued during the summer. This is very common during the course of Bitcoin and crypto history. There are large periods where the price does literally nothing. It becomes boring to watch price movements each day and many people lose interest. Traditionally, these have been some of the best times to accumulate. Considering the world situation and just how young Bitcoin is. I still find it amazing that Bitcoin has stayed in the $19k-$20k range. That is quite an impressive feat.
ETH Merge was a Dud
One of the biggest reasons to be bullish about crypto this fall was the Ethereum merge. There were hopes that the merge would be enough to change the market sentiment from bearish into bullish. That it would send Ethereum's price soaring and pull up the rest of the crypto market with it. The price of ETH did reach $2k before it began to fizzle out. Unfortunately, the merge couldn't overcome all the hurdles that financial markets are currently throwing our way.
Some people consider the merge to be a buy-the-rumor, sell-the-news type of event. But, I would argue that its effect will be very similar to how Bitcoin halving's perform. With each Bitcoin halving, the price increases a little before the event due to the hype that is created. But, then there is a long period of nothing happening. There is a delayed effect. Then several months later, the supply of Bitcoin begins to become constrained due to the halving, and this is what causes the price to begin going up. Which typically causes the next bull market to begin. I believe this is exactly what will happen with Ethereum as well. It won't happen today, tomorrow, or even next month. But six months from now, we will begin to see a noticeable effect on the Ethereum supply. This could prove to be very bullish.
Macro, Macro, Macro
No matter how hard we try, we just cannot escape the macro situation. Inflation, interest rates, war, and global debt are all affecting financial markets. Most would agree that the world has entered a recession and that we are on the brink of a great depression. When moments of panic happen, people run for the assets that they trust the most. Right now, the trust is in the US dollar and that is where everyone is running. If macro factors continue to worsen, crypto prices will likely continue to see pain. On the other hand, if some of these factors were to improve, or go away. That could be what we need in the crypto market for prices to begin to recover.
While the USA is only one country, whatever the FED does, affects the entire world. As the saying goes, "when the FED sneezes, the world catches a cold." Recently the FED has been raising interest rates which have put several other countries around the world in a difficult situation, and also directly sent Bitcoin's price lower. But because the USA's national debt is so high, and the higher interest rates have been hurting many of its closest allies. They cannot keep raising rates forever. Eventually, the FED will have to pivot. When that will happen, no one knows. But it's inevitable. That would send crypto prices soaring.
XRP lawsuit potentially coming to an end?
This may be the first time that I have ever discussed XRP on my blog, but this is a critically important issue. Many of you will already know that the SEC has sued XRP, claiming that it is a security. If XRP would lose, this is something that would send shockwaves throughout the crypto industry. Nearly every crypto outside of Bitcoin could then be considered a security. This would be a disastrous day for the industry and send prices lower than many of us want to see.
But, recently news tidbits have been coming out of the trial and also from Ripple. The news has been optimistic that the SEC might actually be losing in this trial and might not have much of a case against Ripple. We will likely begin to hear outcomes from this trial within the next few months. While if XRP would lose the trial, it would hurt the industry. But, if they were to win, it would be a very positive day for the crypto market. Which as you might have already guessed, would send crypto prices up in a hurry.
Tick Tock, Another Block
Each day that Bitcoin survives and blocks are mined is a very bullish day for Bitcoin. The network is becoming stronger and more decentralized. It's hard to believe, but we are much closer to the next Bitcoin halving than most people realize. Only about 17 months give or take. We are closer to the next Bitcoin halving than we are to the previous halving. As I already mentioned above, Bitcoin halvings are generally credited with being the catalyst that starts each bull market. Prices begin rising about five to six months after the halving, which means the next bull cycle could be about 22 months away. It might seem far, but it will be here sooner than you know it. What this all means is that these quiet times are the perfect times to be accumulating. I wish I would have accumulated more during the quiet times of 2019. It may not be today, tomorrow, or even before the end of the year, but eventually, Bitcoin's price will recover.
As for me, I will be honest and admit that I'm feeling pretty bearish for the remainder of the year. Right now, everything is playing second fiddle to the macro factor, and right now the macro situation is quite ugly. When I say that I'm feeling bearish, that is just in regards to where I think the price will be heading. With that said, I have never been accumulating more. I'm trying to take advantage of these great prices that we are seeing right now. When Bitcoin was nearly $70k, we all wished that we could accumulate again for under $20k. Here is our chance.
How about you? What is your current outlook on the crypto market?
As always, thank you for reading!
I see the XRP lawsuit as formality and drama, the goal was to wear down the crypto as much as possible and they were successful for that period.
I'm mobile and busy right now, not sure but I remember the bull run started some time before the halving. At least, I think a steady upward trend will start in December at the end of this year. When I watch the last 8 years of Bitcoin according to the halving processes, I come to this conclusion. We experienced the same process during the decline, I think the process will continue the same. Of course, each of these is forecasting and analysis.