Markets
Is the bear market coming to an end?
The cryptocurrency market is currently experiencing significant turbulence, leaving many wondering if the end is near. According to Rekt Fencer, founder of X Daothe crypto community is in a depressed stage, similar to the state of the market in June 2023.
However, a closer look at the data reveals possible signs of recovery on the horizon, despite the prevailing sense of despair.
Altcoin prices drop
Over the past few months, the prices of many altcoins have fallen sharply, by as much as 30% to 70%. This massive drop has left many investors and analysts depressed. However, despite this gloomy outlook, certain trends indicate that the market could soon recover.
Notably, the cryptocurrency market sentiment mirrors that of June 19, 2023, when major cryptocurrencies were also at low points.
As of June 19, 2023, the total market cap was $1.063 billion, with Bitcoin at $26,500, Ethereum at $1,700, and Solana at $15.4. These prices are similar to the current depressed levels. However, as Titan of Crypto notes, this could be a major bear trap.
Factors behind the decline
Several factors have caused the recent market crash. These include Germany selling its BitcoinBitcoin’s release from the Mt. Gox protocol and Bitcoin miners selling their assets to remain profitable. Despite these issues, major investors are holding onto their Bitcoins, showing strong long-term confidence in the cryptocurrency
Bitcoin dominance, which shows its market share compared to other cryptocurrencies, has shown signs of a possible uptrend. While the $58,000 support level has been lost, the $50,000 level could provide a buffer. Market sentiment typically recovers when Bitcoin is seen as overpriced, suggesting a turnaround could be near.
Signs of market recovery
Several upcoming events and factors could trigger a market rally. Miner capitulation could signal a trend reversal as miners stop selling their holdings. Additionally, the potential approval of an Ethereum ETF could bring new interest and investment to the market. Changes in the liquidity of stablecoins, especially USDT, are also important indicators of market demand.
Looking ahead, global liquidity is expected to shift in Q4 2024 and early 2025, which could positively impact the crypto market. Comparing this to the summer of 2020, when altcoins surged after a dip, suggests we may be in the middle of a on the verge of a similar bull run.
Meanwhile, by focusing on long-term trends and future events, investors can better navigate current volatility and prepare for potential gains.
Read too: Strategies for identifying altcoins capable of yielding $1 million in returns