The latest crypto winter has been one of the biggest since the global adoption of cryptocurrencies: but how long does crypto winter last?
War in Ukraine, the demise of the stablecoin TerraUSD (UST), and growing inflation are just a few of the reasons that have impacted the cryptocurrency industry in 2022.
As a result, the crypto market witnessed a significant bear market this year, with the price of BTC dropping below $20,000 from over $60,000 at the end of 2021. Collectively, cryptocurrencies lost up to $2 trillion in value.
This caused many crypto holders to sell off their coins to avoid loss. In addition, many cryptocurrency companies are on the brink of bankruptcy. However, some experts believe the current period won’t be as cold as some crypto holders expect. So, could it still be a hot season?
How long will it last? Comparing it to the Previous Crypto Winters
In many ways, the previous crypto winter was unlike the current one. While conventional finance was experiencing a bull market in 2018, the cryptocurrency industry had a crypto winter, with the price of Bitcoin falling by more than half from its all-time high.
A lot has changed in the crypto and finance market since 2018 till date. Price drops in cryptocurrencies aren’t exclusive to cryptocurrencies but reflect a broader sell-off across practically all asset classes.
The current crypto market is the first time crypto is trading lower than previously in a bear market, also experienced by stocks and bonds investors. Since it’s almost a general bear market, a cryptocurrency recovery may be difficult. In the previous crypto winter, the traditional market wasn’t affected.
But as cryptocurrencies have grown in size since 2018, there has been more awareness of the points of contact with the traditional financial market and fundamentals.
What the Crypto Winter Holds for the Big Coins
Bitcoin’s price has fallen below $19,000 as a wave of selling pressure sweeps the market. The king of all cryptocurrencies has lost over 5% in October alone, despite an increase in its trade volume.
A drop to the summer’s low of under $18,000 is possible in the coming days if the current market circumstances continue. However, if the market prices can break out above the $19,000 moving averages that have been crossed lately, the bearish thesis will be invalidated.
Furthermore, if buyers can push Bitcoin’s price above this resistance level, it may lead to a 10% gain from its present level and a jump back over $20,400 before 2023.
Next is Ethereum. With the bears having lately broken through the lows seen in the immediate past months, the Ethereum price is in a precarious situation. Currently, ETH sells at below $1,500.
The Relative Strength Index has entered a severely oversold area, much like Bitcoin, which means that any rebound is likely to be brief. Predictions are that the price of Ethereum will drop below the summer lows of less than $900. However, this decline might take several weeks to materialize. A $400 ETH price might become the norm in 2023 if bulls fail to maintain the price at the current level.
The third cryptocurrency in view is Ripple. In the wake of the announcement of the US CPI, the value of XRP plummeted by 10%, the most among the top three cryptocurrencies. On shorter time frames, the relative strength index entered historically oversold territory, and since then, there has been a spectacular countertrend rise.
The price of XRP has recovered from a low of $0.44 to sell at around $0.47. Predictions are that the XRP price will return around $0.51 in response to the heavy volume when the price was at $0.44. Although the recent market behaviour should be seen as a countertrend rebound, the XRP price could fall further.
However, a 32% gain from the current XRP price is possible if bulls can break through the $0.56 resistance level and surge into the $0.61 liquidity level.
Whether the crypto winter stays hot or warm for you will depend on what you do with your coins. Unfortunately, market predictions are contradictory, and with their high volatility, it’s difficult to predict the future of cryptocurrencies.
What can you do? You can put your crypto investments on hold until winter is over. Holding on through bull and down markets in cryptocurrency before selling for a profit down the line is what HODL is all about.
HODLers aren’t concerned with short-term swings since they’re in it for the long haul and want to make a profit. But while you HODL, you should watch the market from the sidelines to know when to return. Furthermore, now is a good time to invest in stablecoins. This is not because of the crypto winter alone but because of global inflation. Tether USDT is a good stablecoin to invest in.