Is it Crypto Winter Already? Here’s Our Straight Lowdown

The massive rout of Bitcoin and the whole crypto market has got everyone wondering whether a repeat of the 2018 crypto winter is playing out?

19:33 26 January 2022

The massive rout of Bitcoin and the whole crypto market has got everyone wondering whether a repeat of the 2018 crypto winter is playing out? Let's take a look.

 

The sudden, sharp slide in Bitcoin prices has set the Crypto Twitter ablaze. Facebook groups, YouTube channels are bustling, too. Crypto is trending bigtime on social media for obvious reasons but it's this term that has got everybody buzzing.

 

Crypto winter.

It's a relatively popular term in the cryptosphere, but those who were ventured into crypto post pandemic might not know what it really means. For starters, it refers to a sharp slump in the price of an asset followed by several days or weeks or months of inactivity where the price basically meanders about without moving far or fast. This is not new, however. Apparently, crypto winter is a recurrent event, the first of which befell in 2018 when Bitcoin went into a slumber and the price was in doldrums until one day it decided to soar up putting a big smile on the faces of crypto brethren who had been waiting anxiously for a rally.

 

So, is the Crypto Winter Already Here?

And while obviously, we can't say for sure whether another season of the crypto winter is already upon us. Bitcoin has had a sharp decline. And that’s the first part covered. What about the second part? Are we in for a long period of price stagnation where pretty much nothing happens? We need to wait and see.

 

Speaking of the slump, Bitcoin has had a very rough past few weeks falling to its lowest level since July 2021. It dropped from the all-time high it scaled back in November, when no one anticipated.

 

That's putting it mildly. In reality, Bitcoin has been battered and bruised. Losing 50% of its value in under 10 weeks and just managing to finish 9 sessions in the green so far this year is nothing short of a debacle.

 

But the Bitcoin faithful seemingly don't care at all. Come what may, they are not going to budge. Their belief is simple: keep calm and hodl. It worked for them in 2018 and there is absolutely no reason why it won't this time around.

 

They reckon Bitcoin is currently going through a much-needed cool-off phase after running hot for a little over 10 months and are highly optimistic it's just a matter of time before the digital coin finds its form back and rebounds.

 

Not All Doom and Gloom Though

Although that sounds like an overly optimistic view (considering the carnage we witnessed in the market), things are looking a lot brighter on the build side of things in the crypto market thankfully. It’s business as usual for a lot of fledgling companies in the crypto scene, who are still working diligently on solving real world problems through new crypto products and solutions, as though nothing had happened. And the best part is some of them are scoring deals to the tune of billions. Reports are emerging that a string of developments are starting to happen in this space now.

 

Companies managing crypto-focused funds are garnering interest from VC firms and investors amid all the chaos unfurling in the crypto market. FTX, a reputed crypto exchange and trading platform, recently set aside $2 billion for acquiring and building crypto assets. It has to be noted that this company has followed in the footsteps of Andressen Horowitz, which came out with a massive fund of its own not so long ago and is still very much actively looking to raise money to build up its crypto kitty even in this poor business climate.

 

And that's not all. Traditional businesses are not putting off their plans to enter crypto for later when the time is right and things are in much better shape. Walmart is reportedly looking to get things off the ground with its own cryptocurrencies and non-fungible tokens. Moreover, GameStop, the computer gaming retail chain, is looking to jump into the crypto waters with an exclusive NFT marketplace for gaming aficionados. For those who don't know, GameStop was inching towards business irrelevancy before a group of random people on Reddit decided to make it the lodestar of a crazy stock market trend.

 

What the Technicals Convey

No one has the crystal ball to predict where Bitcoin will end up when 2022 draws to a close. But we at least have a dozen different technical indicators that can help us get an idea of what is likely to happen in the short term. Crypto market with all that volatility and speculation does make our technical analysis look silly at times, but these are reasonably good tools to look through the clutter and see what could be in the offing. Maybe you’re positive Bitcoin will bounce back from its recent lows and want to ride the wave? Check out news spy to find out how its cutting-edge trading bot can help you find your edge in the land of crypto.

 

Trading volume seems to be rising gradually in the past few days, indicating that buyers are still not fully committed to picking up the pieces. When the week started, buyers were a little wary that Bitcoin would fall through the $30k mark, but they weren’t disappointed. The leader of the crypto pack did good to bounce as soon as it hit that range. Although it restored confidence in some buyers, it looks like we might not see a surge in volume, however, with Bitcoin approaching a stern resistance around the $40k mark.

 

Summing Up

Bitcoin and other cryptocurrencies are showing early signs of limping to recovery. After all that happened leading up to this week, it’s a small battle won though. But one swallow doesn't make a summer, as they say. It needs to be seen whether this recovery will be good enough to dig the market out of the sudden slump it has suffered, and put to bed the growing doubts over a sustained downturn. For you never know the market could turn around and crash to much lower levels, marking the onset of the much-dreaded crypto winter.