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Why Crypto Winter is Thawing Crypto Prices Earlier Than Hoped – Buy Now?

Crypto Winter
Crypto Winter

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In 2017, Bitcoin lost around 80% of its value within 12 months. However, the coin resumed an uptrend after and rallied to new highs. In 2022, Bitcoin has dropped by 66% year-to-date (YTD), marking one of the worst crypto winters in history.

Nevertheless, there are now signs that the crypto winter could be thawing. Over the past 24 hours, Bitcoin has gained to $20,598 at the time of writing. The gains made during the past two days have crypto investors anticipating that the crypto winter could be over.

Is the crypto winter over?

Bitcoin is now up by over 7% over the past week following a recent bull run. Altcoins are also trading in the green zone, with the largest altcoin, Ether, trading above $1500. The global market capitalization has also gained to above $1 trillion.

Crypto traders are now optimistic that months of sideways price movements are over and that the crypto winter has finally ended. Bitcoin broke past $20K for the first time since October 7. The recent rally could be attributed to a shift in investor sentiment. N

Nevertheless, Bitcoin’s volatility is yet to come back to full momentum, given that the coin has failed to break past the $21K levels. This means traders could be sitting on the sidelines waiting for action to determine whether they will continue accumulating at the low process.

The recent rally was quite unexpected because it saw around $1 billion in short liquidations for Bitcoin. This was the largest amount of Bitcoin shorts that have been liquidated since July 2021, with part of the recent rally being attributed to traders covering their short positions.

The situation could be seen as a short-squeeze, which is a situation that saw people buy Bitcoin. Nevertheless, the recent consolidation of Bitcoin at $19K for weeks could show that the bottom is in, and the coin could build a notable rally as November starts.

Is the Bitcoin bottom in?

While speaking to Bloomberg, Michael Purves, the founder of Tallbacken Capital Advisors, said that the lack of a major downward movement in Bitcoin is a positive sign. Purves also opines that the small trading range that Bitcoin has recorded in recent weeks shows that selling pressure has been exhausted.

Likely, most traders that wanted to sell Bitcoin have already done so, and the bottom could be here. However, Purves opines that several factors must be at play for Bitcoin to rally.

One of the factors needed is for Bitcoin to attract new money, which will likely come from institutional investors. However, he does not see this happening in the short term, as the bulls will have to see much more before they can support a bullish momentum.

Next week could see Bitcoin making major swings as the US Federal Reserve announces its decision on interest rates. This year, the Fed’s repeated hikes have seen investors shy away from risky assets such as cryptocurrencies.

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