The Crypto Market Seems to Have Hit Bottom… for Now

2022 has already been an interesting year for crypto. How interesting depends on your perspective. Let’s take bitcoin, for example.

Here what bitcoin’s chart looks like:

1 Day: +0.33%

5 Day: +5.4%

1 Month: -27.12%

6 Month: -7.67%

Year-to-date: -22.56%

1 Year: +21.52%

5 Year: +3,469.50%

Now let’s take a look at Ravencoin’s (RVN) chart:

1 Day: -1.93%

5 Day: +4.89%

1 Month: -34.09%

6 Month: -50.47%

Year-to-date: -35.84%

1 Year: +303.38%

Since March 2018 debut: +101.69%

As these two charts show, time frame matters for investors. It’s never fun when the market is correcting (or freezing cold). But it’s worth being in quality coins for the long haul.

In terms of the crypto market this year, the market feels like it has bottomed out for now. For the short term, bitcoin appears to be in a trading range of $33,000 to $40,000. But a series of upcoming events could spook the markets.

Typically, bitcoin is a non-correlated asset. It doesn’t move in tandem with stock markets. But bitcoin can act like a correlated asset when there’s a lot of panic selling or a major correction in the equity markets. With the Fed likely to increase interest rates in March, we could see significant downward pressure when the (expected) rate hike is announced.

In theory, the rate hike should already be priced into the market. But I don’t think it is. So we could see some downward pressure there.

Then there’s ongoing regulatory concerns. The SEC wants to introduce regulations this year. Bitcoin mining came under scrutiny in Congress this week. The International Monetary Fund is unhappy with El Salvador embracing bitcoin as legal tender. Russia wants crypto to just disappear. And that’s just the beginning of the list.

If bitcoin continues to stay above the $30,000 mark despite the headwinds coming up, the markets could be okay. And we could even see a bit of a rally. If bitcoin drops below $30,000, I believe it will eventually sink well below that. 

22V analyst John Roque notes that the median bitcoin bear market decline is 78%. That means $15,000 is likely the absolute floor.

And that’s good news for crypto owners. The last floor was in the $3,000 range. And that’s what we usually see in the crypto market — higher lows and higher highs in each cycle.

The next several weeks will determine which direction we’re heading in. Adam wrote recently that he believes the market has bottomed out. And it certainly looks like that for now. Let’s hope it stays that way. 

The post The Crypto Market Seems to Have Hit Bottom… for Now appeared first on Early Investing.

Source: Early Investing

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