“Crypto Winter may be over” if Bitcoin’s price does this, according to an expert

If the price of bitcoin stabilizes over the next two weeks, the long-term crypto bear market – also known as crypto winter – could end as quickly as it started.

This is according to Edward Moya, senior market analyst at the brokerage firm Oanda, who says “Wall Street enjoys a positive risk mood which is good news for crypto.” He says the crypto market is starting to look “attractive now that the economy is looking a little better as expectations of Fed austerity eased.”

Moya is aiming for the rising stock market in recent days and a general dampening of macroeconomic fears among investors. Often an increase in shares will also lift cryptocurrencies. He says investors are starting to feel more optimistic about the economy, inflation and rising interest rates, which is a positive sign for risky assets. It is usually the case that the more confident investors feel about the stock market and the broader macroeconomic environment, the more risk they are willing to take.

Bitcoin rose above $ 23,000 on Tuesday, reaching its highest level in more than a month. Ethereum has risen more than 40% in recent days and traded above $ 1,500 on Tuesday.

Many crypto experts we have spoken to in recent months have been expecting one last major drop for the crypto market, with some aiming for a bottom of between $ 10,000 to $ 14,000 for bitcoin. While that may still happen, Moya says that if more institutions buy in over the next few weeks, it could allow the bottom of bitcoin to have been made since “market positioning became extreme.”

What’s next for the crypto market and how should investors react?

Less than a month ago, crypto was in the middle of one of the worst market crashes it has ever experienced. Bitcoin and ethereum fell more than 70% since the peak of last year’s bull run. Several high-profile crypto companies, especially the hedge fund Three Arrows Capital and crypto lender Celsius, filed for bankruptcy. The size of the industry itself had fallen below $ 1 trillion, a significant decrease from just a few months before when it was worth more than $ 3 trillion.

But investors are holding out hope that the shakeout in recent weeks is coming to an end, says Marcus Sotiriou, a market analyst at the broker of digital assets GlobalBlock. Crypto prices are pushing up as investors begin to feel more positive about the crypto market, thanks in part to the recent rise in stock markets across the US, Europe and Asia, he says. Cryptocurrencies, especially bitcoin, have been closely following the stock markets since the beginning of the year.

“When the market starts to react positively to negative news, this is a signal that a local bottom may be in for now, as fear may have led to the news being priced in,” says Sotiriou.

Despite the positive momentum in recent days, the crypto market is still suffering. Both bitcoin and ethererum are down more than 50% this year, and bitcoin had its worst quarterly loss in more than a decade between April and June.

“We are in a full-fledged bear market, not a bear cycle. Just because we see positive pricing measures does not mean we are out of the blue,” says crypto expert and educator Wendy O. “We are currently trading for $ 1500. [for ethereum], and for me to be super bullish on ethereum, I have to see us break above $ 2,248. It’s a 50% price pump there. “

So, what does the latest cryptocurrency rally mean for investors? It should not significantly change your crypto investments or how you invest in crypto if you are into it in the long run. Given the cryptocurrency’s history of volatility, this increase does not guarantee a long-term reversal. Cryptocurrencies are just as likely to fall back as they will continue to climb.

Because the future of cryptocurrency is guaranteed to include much more volatility, financial advisors recommend that you do not allocate more than 5% of your investment portfolio to crypto and invest only what you are good at losing. Always make sure your financial bases are covered – from your retirement accounts to emergency savings – before putting extra money into a speculative asset like bitcoin or ethereum.

“We have a long way to go before anything happens,” says O.