The massive rally of 2021 has attracted many to the crypto space, or rather crypto became a hot topic and generated a huge interest in the mass market. Moreover, the bull run also compelled big institutions, investors & authorities to pay attention to the crypto space. All of that took a turn and the market fell prey to a gigantic crash in May led by the collapse of the Terra Ecosystem. The impact of this collapse was larger than expected and once coupled with the FED rates and the world economy in general, it ended up creating a ripple effect.
Many platforms ran out of liquidity, which compelled them to halt the withdrawals for their customers. Celsius Network, 3 Arrow Capital, Voyager Capital, etc, collapsed in no time. The most recent one added to this list is the FTX exchange; which was among the largest crypto exchanges in the world. The collapse ignited speculation of a liquidity crunch over the platform that led to another market crash that compelled the majority of cryptos including Bitcoin & Ethereum to mark their new yearly lows.
However, now the burning question is whether the crypto markets will recover. If yes, is there any chance of the crypto space encountering another 2021-like bull run?
Let’s dive in to know more!
Comparison: Market Before the Crash vs After the Crash
|Metrics/ Cryptos||Value Before the Crash||Value After the Crash|
|Market Cap||$1.05 billion||$838.8 million|
|Market Volume||$110.62 billion||$81.74 billion|
Will the Crypto Market Ever Recover from the Crash?
The crypto markets have been promising and carry the potential to rebound in very less time ever since their inception. Bitcoin, to be specific has witnessed more than 3 bearish markets and each time has rebounded finely to record a new ATH(All-Time High). However, the current slump is a little more diverse than before as the players have extended their reach and paving way for fabricated rallies.
Meanwhile, the market participants also have gained enough from previous experiences and hence not offering many roles for the players to accomplish their job. So now that crypto markets are entitled to a rebound, how soon it may occur?
Currently, the crypto markets are under extreme pressure and are predicted to mark new lows before the end of 2022. The near future may not be much positive for the crypto markets as markets are diving towards the bottom, while the pace appears to have reduced comparatively.
Moreover, according to some analyses, crypto markets are moving very closely with the stock markets in recent times. Hence, now when economists predict a possible recession as the inflation rates are at a 40-year high, it may also impact the crypto space to a large extent. However, the bulls have jumped at the right time and the crypto markets recovered as it does each time
On the other hand, despite the current market trend does not appear to be in favor of the bulls, the number of businesses accepting crypto payments is surging constantly. Moreover, many platforms have jumped into the NFT & Metaverse space too. However, the crypto winter was more than a year after the 2017-18 bull run, which was followed by a gigantic bull run.
Therefore, the current consolidated trend may continue for some time, post to which a monstrous rally may begin.
Read more: FTX crypto collapse explained
Is this the Right Time to Buy the Dip?
The crypto markets including Bitcoin crashed three times in 2022 and each time reached new lows. Therefore, it is hard to predict the times when the markets may hit the dips. Moreover, the whales are quietly accumulating crypto assets, leaving very less impact on the value of the tokens. Therefore, pointing towards speculation of the revival of a firm bullish trend in the coming days ahead.
It is always a good time to get into the market with enough knowledge and research. As mentioned before, the markets are presently very volatile and uncertain at the moment which may pave way for FUD & FOMO. Additionally, the principle of buying at the dip is based on the assumption that the price drops are temporary and the bulls may soon take over the rally ahead.
Therefore, the crypto space is here to stay and the current bearish trend is assumed to rebound at the earliest, Meanwhile, buying bitcoin price at its dip may also attract new strong hands who may ignite a decent upswing soon.
Read more: BTC price prediction
Recent Crypto Crash Updates
- The ongoing FTX collapse has impacted deeply to the entire crypto space with more than $200 billion being whipped out within a couple of days
- Cathie Wood, CEO of ARK Invest believes that the FTX collapse could delay institutional adoption by years
- The payment giant VISA terminates its global debit card agreements with FTX
- As per blockworks, nearly 25% to 40% of crypto-focused hedge funds have some level of direct exposure to the FTX exchange or its native token FTT.
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