The current state of the cryptocurrency market has left altcoin investors disillusioned and doubtful about the future. Michaël van de Poppe, CEO and founder of MN Trading, sheds light on the prolonged crypto winter and its impact on altcoin markets. With the bear market lasting for more than two years, many investors are losing faith. However, this article examines the potential for a trend reversal and the factors contributing to the prolonged winter.
Since May 2021, altcoin markets have been in a downward spiral, marking the “longest existing bear market for cryptocurrencies.” The events of 2022, including major collapses and regulatory pressures, have contributed to this extended period of decline. The involvement of the Securities and Exchange Commission and the increasing interest of traditional finance companies in cryptocurrencies have created an atmosphere of uncertainty and doubt.
Trending Downwards but Hope Remains
Altcoins have been trending downwards for a significant period, but this does not necessarily indicate a continuous decline. Van de Poppe suggests that despite the current low sentiment and cycle lows for Bitcoin pairs, markets may see a turnaround. The second stage of capitulation, known as the “boring stage,” may pave the way for a change in trend. Additionally, the entrance of large institutions into the market adds to the possibility of a shift in the crypto landscape.
Will Clemente, founder of Reflexivity Research, affirms that this bear market is worse than previous ones. The realized cap drawdowns indicate substantial losses for those who bought at the top of the previous market cycle. The severity of this bear market is reflected in the low volume and volatility levels. Bitcoin’s 10-day realized volatility is on the verge of falling below that of stocks, bonds, and gold, emphasizing the lack of movement in the market.
Total market capitalization stands at $1.2 trillion, with yet another week of consolidation coming to a close. The sideways movement that began in March has led to market stagnation, with the total cap hovering around this level. Bitcoin, in particular, has reached a six-week low and remains flat at $29,180. Ethereum, too, has been downtrending for the past three weeks and has been stuck in a sideways pattern for months, despite the recent surge in ETH ETF applications.
The prolonged crypto winter has left altcoin investors disheartened and skeptical. While the current trend may seem discouraging, there is still hope for a potential turnaround. Market sentiment and volatility remain at record lows, unsettling investors. However, the second stage of capitulation and the involvement of institutional investors hint at a future shift in the crypto landscape. As altcoin markets continue to navigate the uncertainties of the regulatory landscape, investors must carefully consider their strategies and remain patient in the face of the ongoing crypto winter.