After a rather rocky year, Bitcoin and Ethereum prices are looking up. However, some experts aren’t quite ready to say investors are in the clear from recent price swings in the crypto markets.
How Far These Cryptos Has Come
The two largest cryptocurrencies are still down by more than 50% from their all-time highs late last year. Notwithstanding, in typical fashion, the crypto market rebounded significantly in July. With price of Bitcoin and Ethereum up by more than 30% and 70% respectively since the market meltdown in June.
Could this be a signal to investors that things are going to only go up from this point on? Well, time will tell.
As at Thursday, bitcoin was etching closer to $25,000 and Ethereum crept up above the $1,900 mark. This followed the release of July’s inflation data and new progress on Ethereum’s massive software upgrade. Inflation eased a bit from historically high levels in July which in turn led toa rally in the stock and crypto markets.
Ethereum picked up some momentum this week after some developers successfully completed another test on one of its test networks. The test network called Goerli, was tested by simulating a process identical to what will happen on the main Ethereum network in a month.
However, some experts are still skeptical about what recent price jumps could mean on the long term.
“The Fed is still indeed tightening, and inflation is still high, so we cannot be convinced of a market reversal currently,” says Marcus Sotiriou, a market analyst at the digital asset broker GlobalBlock.
“But the fact that the Fed Chairman – Jerome Powell – has started to say that the rate hikes have had a noticeable impact signals something. It signals that we are in the later stages of this bear market, which we are around 8 months into.”
Have Bitcoin And Ethereum Prices Reached A Bottom
Bitcoin and ethereum have gained significant momentum for a few weeks now. While the surge in Bitcoin and Ethereum’s prices have been impressive, crypto ties to the stock market could be a sign of future volatility.
The stock market had it’s best performance since 2020 in July and continues to show gains in August. So, you could make an argument that crypto is currently benefiting fro the rally in stocks says Scott Sheridan, CEO of brokage firm Tastyworks. By that same measure, if the stocks weaken again, then crypto will likely follow.
“I think if you start seeing the market give up some of the recent gains, you’ll probably see something similar in crypto.” Sheridan says.
Wendy O Gives Her Crypto Verdict
Crypto educator and market analysts Wendy O also isn’t convinced Bitcoin and Ethereum have hit their lowest price of this cycle yet. Wendy says the market will see “true capitulation in the bear market.” She believes that this will last for another one or two years. Capitulation is the moment when investors lose all confidence in the outlook for prices, even after they have tumbled. These images show what capitulation could look like for bitcoin and ethereum over the next year. Wendy added.
Although the prices of cryptocurrencies are almost impossible to predict with certainty. Wendy says that signs are pointing to Bitcoin and Ethereum dropping back down past their June lows of $17,500 and $900 respectively.
Continued economic and political uncertainty could create even more volatility in the market in the following months.
“In previous bear cycles, both cryptos have corrected 85%, and i anticipate Bitcoin to hit $10,000 and Ethereum to hit $750.”
Wendy O.
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