Crypto markets have been in a downtrend for more than a year, and an extended period of low volatility may be on the way, according to one analyst.
Others, however, believe that once the macro situation improves, there will be a quick turnaround.
On December 18, cryptocurrency analyst “Cold Blooded Shiller” compared the current market to the previous bear cycle in 2018/19. Following the period of rapid declines, markets entered a period of sideways trading and very low volatility that lasted approximately 18 months.
If history repeats itself, the analyst believes that crypto winter could last until 2024.
However, there are some who believe that crypto markets will recover faster. According to DeFi analyst ‘Kamikaz ETH,’ comparing markets to those before the ‘DeFi Summer’ is meaningless.
“There will be no extended 1-2 year crypto winter – a couple of months at most, depending on how quickly macro bottoms,” says the author.
They also stated that every traditional finance firm is preparing to offer crypto services, and that crypto now has a plethora of real-world applications, the majority of which are based on Ethereum.
“2020/2021 was the first crypto cycle based on actual functional use cases, not the third,” they added.
Aside from use cases, the macroeconomic situation has a greater impact on crypto markets. Retail investors are unlikely to reinvest until they have extra cash. This is unlikely to occur until inflation is controlled and energy, utility, and household bills return to reasonable levels.
The majority of next year will most likely be a continuation of the current range-bound market movements, with no significant breakouts. The final flush-out appears to have occurred, with markets falling 73% from peak to trough, but this does not rule out another panic selloff.
Over the weekend, markets were flat with little activity. During Monday’s Asian trading session, total capitalization was $840 billion, which was very close to the cycle bottom last month.
According to CoinGecko, BTC had fallen to $16,663, while Ethereum was also down at $1,177 at the time of writing.