Many weeks after the biggest crash of 2022 so far – and since 2018 – the cryptosphere is showing signs of gathering strength for a strong rebound. Bitcoin got a great start to the week with the sum of 25,000 USD for one token late on Sunday. Previously, it managed to reach close to it but never went over the same huge psychological barrier. It managed to do it finally in the late hours of Sunday and thus kicked off Monday with big expectations. However, the subsequent two days saw a retracement and a retreat to the 24,000 USD levels for bitcoin, while other digital currencies moved even further into the negative territory. Now, bitcoin is back in the 20,000 USD to 24,000 range, which it occupied for the better part of a month.
At the same time, investors are paying close attention to the movements of the markets, but are in a wait-and-see mode, as not many are willing to bet big that the prices will go up drastically. This is aided by some other confounding indicators of the wider economy, as well as solid company earnings for this ecosystem. While esports players who hold crypto and other digital currency enthusiasts were quick to signal that the crypto winter might be shorter than expected, it is still too early to say if this movement of the markets, no matter how objectively positive it might be, can turn into a strong and persistent crypto rebound. But, the alignment of market upward motion and the overall macroeconomic factors does give enough cause for optimism in an otherwise critically bad period for the cryptocurrencies.
Profit-Taking and Recovery Chances
Financial analysts are in an agreement that the crypto market is presently testing its important barriers. That is taking place as many traders are actually invested in profit-taking – those who put money into the market when ETH reached around 1,000 USD could now see a big return on their investment. As that is taking place, the process of a big and drastic rise in market capitalization is unlikely, thanks to the fact that money is both flowing in and out of the exchanges.
Also, the rise of over 2,000 USD price for ETH tokens would quickly turn negative as many investors would yet again reach out for profit-taking if they are able to do so. Of course, none of that is a fixed and definite prediction for what will happen in the coming days, as the crypto markets are notoriously unpredictable. But, that definitely means that there is no momentum for a full breakout in the immediate future. That applies to the ethereum network in particular, as it experienced more substantial price swings than the bitcoin network and its tokens.
Similar to bitcoin, ethereum followed a rising then descending pattern. On Sunday, it managed to climb to over 2,000 USD, but then it quickly descended to 1,900 USD and continued to fall further down. Now, it is trading in the upper 1,800 USD range. That is however still much higher than its average values over the summer so far. Experts believe that this also shows growing enthusiasm for the latest ethereum network upgrade, The Merge. It should eventually modify the processes behind the current proof-of-work to that of proof-of-stake for the network, ushering in a new chapter in the cryptocurrency space.
Interestingly, the joke meme coins of shiba and dogecoin managed to fall even lower once the retracement began, stumbling on average around 8 percent in a space of just several hours. But, the movement of ETH tokens shows that there is a possibility for new support like between 1,600 USD and 1,800 USD, which would be a springboard for the upcoming attempts to change the negative balance of the second biggest crypto token on the market.
Range of Crypto News
The strong movements from the last few days also came because of the otherwise quiet crypto industry news domain. Since the start of the ongoing crypto winter, the amount of news coming from the same space dwindled down drastically, as many began to write off any experience and changes in that field. The lack of interest, both positive and negative, always reflect badly on the price movement. Now, that began to change as well. This includes the news that the big crypto-related financial service company Galaxy Digital is no longer buying BitGo.
The deal that saw Galaxy dishing out 1.2 billion USD in cash and stock apparently fell through and the boss of the financial company, Michael Novogratz declared that the company is no longer interested in a purchase. Now, BitGo said that it has plans to sue Galaxy and the story behind this will surely develop as well. In Europe, Revolute got access and authorization from the Cyprus Securities and Exchange Commission to offer its crypto services across a huge market. That is the European Economic Area, expanding its access by some 17 million potential customers. All of this is actually positive for crypto interests, which will sooner or later translate itself into rising prices and more investment on all levels.
Finally, it is important to note that crypto princesses are apparently slowly decoupling from most macroeconomic events. These events include commodities rolling over, peak inflation, and overall bad news from the global economies. That decoupling is also a good sign for the crypto markets. An almost identical pattern occurred in mid-2020 when the pandemic was still ongoing and producing huge problems for the traditional economies.
At the start of the year, in March 2020, the markets crashed and took cryptocurrencies with them. BTC and ETH, as well as all other tokens, dropped down fast and hard, just as the impact of the pandemic across the world became clear. But, before the mainstream economy got its big break and rebound with the loosening of the pandemic restrictions, crypto was already on the rise. In less than a year, it hit its record value. A chance for something similar seems to be in the cards presently as well.