The crypto market has experienced a significant decline in 2022. By the end of November 2022, the market had fallen by more than 70% from its previous peak in November 2021.
Just when crypto enthusiasts thought they had seen it all, the FTX crash pushed the market even lower. With the overwhelming negative sentiment in the market, many people wonder what is the fate of the crypto market and what to expect in 2023.
3 Reasons Crypto Will Recover in 2023
Let’s look at the reasons why the crypto market will recover in 2023.
1. The crypto market has experienced significant declines in the past
Bitcoin, the most popular cryptocurrency and the largest in terms of its market cap, has gone through significant bear markets and dips.
The price of bitcoin peaked at around $1,160 on November 30, 2013, then underwent a steep price decline that lasted for over a year, and by January 2015, 1 BTC was selling for $150. In 2017, the price of BTC broke the previous high made in 2013 and reached a new peak that year around $19,600. By December 2018, the price of bitcoin was already trading as low as $3,100.
In December 2020, the price broke the resistance formed in 2017 and formed a higher high until it reached $68,000 in November 2021. Since then, we have seen a significant drop in the market, which has also been followed by more negative sentiment. More involved in the crypto market.
Looking at bitcoin price history, we can conclude that the current situation is just a case of history repeating, and we expect the price to start recovering in 2023.
2. Every Bitcoin Bear Market Has Been Followed by a Long Bull Run
If you still consider the bitcoin price illustration we made in the first point, you will find that the crypto market is a very volatile one, and significant decreases in price are followed by large increases in price.
You will also notice that bullish streaks in bear markets also tend to last longer and eventually break through the resistance created by the previous high of the market price.
Wild price trends are evident not only in the bitcoin market. However, we put more emphasis on bitcoin because its price movement has a significant impact on the price of other cryptocurrencies. More than that, the dominance of bitcoin significantly affects the sentiment of the crypto market.
3. Growing Use of Crypto and Blockchain
There are more projects and approvals for cryptocurrencies now than in previous years. For example, look at the gaming industry, where cryptocurrencies are reducing the need for intermediaries by reducing the need to use debit and credit cards to make payments. Players also earn crypto rewards while playing the game – thanks to cryptocurrency and blockchain technologies.
The banking industry has also been affected by crypto and blockchain technologies. More financial institutions and major companies are accepting bitcoin than ever before.
It is clear that crypto and blockchain use cases have increased, and they are more accepted than they were a few years ago. For these reasons, the bear market is not expected to last for too long, with a progressive correction expected in 2023.
Will crypto rise in 2023?
Being patient and playing the long term game may help you emerge stronger from the ongoing crypto winter. Don’t expect to recover all your money quickly, as it takes time to build up market value. Many spot traders lose a lot of money during bear markets, but patient ones recover some, or even all, of it over time. Being patient and disciplined helps in keeping your emotions and judgment under control.
But will cryptocurrencies rise in 2023? It’s anyone’s guess.
Have you ever wondered what to do when cryptocurrency prices start falling sharply? Maybe you are distracted or join those who believe this is the end of crypto. Such drastic drop in prices is not a new thing; They happen in all financial markets. This is usually a period when the market relaxes after a long period of upward movement.
We’ll quickly explain what these massive declines – known as bear markets – are and what you can do to avoid them.
What is a bear crypto market?
A bear crypto market refers to a strong market selloff that is characterized by a significant price decline over a considerable period of time. This is a period where supply exceeds demand, causing prices to decline and investor confidence to decline.
Investors with a pessimistic outlook, anticipating that the market price will continue to decline, are called bears. Trading in a bear market can be challenging, especially for traders who do not already have any expertise.
Bear markets not only happen in the crypto space, but also in traditional markets like forex, stocks, real estate, bonds, etc. However, bear markets in crypto are usually more volatile than traditional markets. This may be because the crypto space is still relatively new and not as established as traditional markets.