There has been a lot of trouble in recent times in the world of cryptocurrency over the past few weeks. The financial markets are facing havoc right now. The pandemic is still lingering, and geopolitical tensions are plaguing the entire globe. This has led to the present times becoming quite difficult for investors worldwide. This is more valid for the investors in the world of cryptos. The global cryptocurrency market has lost more than 800 million in market cap in months. This has resulted in one central question being asked by investors in the financial markets everywhere. When will the cryptocurrency markets go up? The nature of issues around the sudden decline in the value of cryptos makes it complicated to find out the right response to this query. But there is something more valid to be discussed here. There are more chances of a further decline than any recovery in this space right now.
There are a number of problems that are facing the global equity and crypto markets. It is not easy to say when these issues may go away to revert to the drastically falling prices of cryptos. Let us find out more about when the cryptocurrency markets will go up. Darshan Bathija, CEO and Co-Founder of Vauld, said, "Even as Bitcoin's price stabilized around the $30,000 level, data from Glassnode suggested a spike in BTC transfer volume to exchanges. This implies that many traders were moving their BTC to exchanges to sell. Similar to how BTC's correlation to the S&P 500 restricted the asset's recovery, ETH's correlation to BTC led to the altcoin trading closely with BTC. Some altcoins like MATIC posted gains compared to Bitcoin, suggesting that traders still showed a greater risk appetite. Having said that, the overall crypto market sentiment was still at the levels that implied extreme fear."
The Federal Reserve hiked the interest rates recently in the nation to control the raging inflation levels that are the highest in nearly half a century. This has resulted in significant volatility in the global markets. There have been other central banks around the globe that have also raised their interest rates. The cryptocurrency market has also been affected by the selloff in equities around the planet. Also, the war in Ukraine is not giving any signals of slowing down. Meanwhile, the prices of essential commodities such as wheat exported by Ukraine are going up as the nation fights for its own survival. The issues in the supply chain are also back in the news, and the war has also played a part in it. There is nobody who can say for sure when the war is going to end. So, things are not looking so good for global growth after the easing of the coronavirus pandemic. This has made it quite difficult for crypto assets to get new avenues of growth.
Bank of America Global Crypto and Digital Asset Strategist Alkesh Shah said, "You have had, obviously, moves of 50% during this correction, but that's really after you had a 350% move up since January of last year. Our sense is that if we start getting some regulatory clarity by the end of this year, that would also give enough time for a lot of macro factors to be digested. It's possible that we start moving out of this range sometime over the next six to 12 months." Edul Patel, CEO, and Co-founder, of Mudrex, said, "BTC's support at US$30,000 could keep the short-term buyers active, while resistance holds at US$35,000. The second-largest cryptocurrency, Ethereum, also rose by nearly 3% after dropping below US$2,300 for the first time since January. The UST also returned to US$0.90 as the LFG's bitcoin reserves outweighed its worn-out supply on exchanges. The market seems to have started to recover a bit from the recent downward trend."
There are economic headwinds in the financial markets right now. But there is still no clear bear market in the crypto space. The currency is still in the nascent stages of adoption around the globe. The overall valuation of the sector has been under two and a half million for the past few months. But this could see a change by the end of this year. This is because there are more signals that the administration will give some details about regulations that they are going to pass for the cryptocurrency markets. A great thing about the sector for retail and small investors is that they can invest some money early on in developing tech. This is a category of investing reserved for venture capitalists or until the initial public offering of a firm. But over the short term, the overall volatility of the cryptocurrency markets is hard to overlook. Given the present fluctuations in this space, the experts are recommending against smaller investors more than ten percent of their overall portfolio in the cryptocurrency markets.
There is not a lot of regulation in this space. President Biden recently issued an executive order to examine the matter further. It can be simple for investors to lose their money if they do not conduct the right research. Investors who cannot give a lot of time to trading may like to hire a professional fund manager who can look after their funds. Over the long term, investors are confident regarding the cryptocurrency markets. But what is important is not whether one cryptocurrency does well daily. The issue is more about how many investors are adopting this tech and the assets that are going to grow in value based on that mass adoption. For the people who want to invest in this space, the suggestion would be to keep waiting until the bottom is closer. You do not want to be an investor in new tech and then see its value go down even more. You must remember to keep a watch over the positive signs and follow the international financial markets and the news to find out about the general mood regarding the space. When will the cryptocurrency markets go up? Nobody can say for sure.
WazirX Trade Desk said in a note, "On the daily time-frame, the trend for BTC is on the verge of breaking below the long-formed triangle pattern. The trend could bounce back from this support level. If, however, the chart breaks below the pattern, then the next support for BTC can be expected at $28,600. The daily RSI for Bitcoin recovered back marginally but still remains at an oversold zone." Kenny Estes, the CEO and fund manager at Diffuse, said, "I would warn people away from going and putting all of your life savings in and hoping it goes up. That is just not how this asset class works." Frederick Standfield, a CFP with Lifewater Wealth Management in Atlanta, Georgia, said, "If you were to wake one morning to find that crypto has been banned by the developed nations and became worthless, would you be OK?"
The experts and other people can only give their predictions on the future state of the cryptocurrency market. Nobody is sure what value cryptocurrencies may give investors in the near future. But the truth is that it is still relatively new and can be termed a speculative investment. It does not have a lot of history on which experts can make calculations and predictions. Any expert who claims to know for certain what will happen in the crypto space is mistaken. That is why it is crucial to only put your money in the crypto space that you are prepared to lose. Right now, it is advisable to stick to investments that promote wealth building in the long term. Investors should keep their investments small right now. They should never put their investments in crypto above any other financial goals, such as paying off their high-interest debts and saving for retirement.