Will there be a crypto winter? An analyst (Cold Blooded Shiller) believes that the digital currency market will likely enter a long and low-volatility period after experiencing a bearish trend for more than a year. However, others disagree, thinking that improving macroeconomic conditions in the coming months will likely lead to a return of capital and a price recovery.
According to the CryptoPotito report, an analyst with the nickname Cold Blooded Shiller (Cold Blooded Shiller) on December 18 compared the current market with the last bear cycle in 2018 and 2019. During this period, after a rapid downward movement, the market entered a state of stagnation for about 18 months in the form of suffering trades with very low volatility.
This analyst believes that if history follows a similar pattern, this could happen again as the cryptocurrency winter continues into 2024.
Will we see a quick recovery?
However, other views predict that the digital currency market conditions will improve faster. Kamikaz_ETH, a DeFi analyst, said that comparing the current market with the markets before the DeFi summer (2020) is meaningless.
He said this:
The digital currency winter will not last another year or two. Depending on how quickly we reach the bottom of the macro market, it will ultimately take several months.
He continued that every traditional financial company is gearing up to offer digital currency services. These assets already have many uses, most of which are based on the Ethereum network.
Kamikaze ETH added:
The years 2021 and 2022 were not the third cycle of the digital currency market; This period was the first cycle of digital currencies based on real applications.
Besides the uses, the macroeconomic situation also affects the digital currency market. Retail investors will likely return to the market once they have extra cash. This is likely to happen once inflation is under control, and the cost of energy, utility, and household bills return to reasonable levels.
The current bear market will likely continue without any real breakout for most of the next year. After falling 73% from the peak price, we have reached the bottom of the market. Of course, this doesn’t necessarily mean we won’t experience another fear-driven sell.
A look at the state of the digital currency market
The state of the digital currency market at the beginning of this week was stable and had very little activity. The market’s total value reached $840 billion when Asian markets started trading hours on Monday morning, which is very close to the bottom of the cycle last month.
According to CoinGecko, the price of Bitcoin has fallen to around $16,730, while the cost of Ethereum is hovering at about $1,180.
