The winter crypto and thebear marketof 2022 are far from over, according to some industry experts.The dataon-chainsupport the premise that the ice is still not thaw for a time.
According to the co-founder ofTezos, Kathleen Breitman, the winter crypto ongoing “it's only going to get worse”.The industry needs recalibrated to a world with higher interest rates, and I have noted.
Speaking with CNBC on November 2, the industry expertblamed the signatures of riskfor the bear market:
"A lot of this was inflated with cheap money, and a lot of this was basically backed by venture capitalists trying to pump."
Breitman added that the easy money coming into the system has fueled the value of some of the companies. I have used OpenSea as an example. Market trading volume plummeted 88% between September 2021 and September 2022.
The comments mainly focused on overinflated valuations of cryptocurrency companies rather than today's asset prices.
Tezos (XTZ) have largely fallen out of favor with cryptocurrency traders and investors. The eleven were touted Proof-of-Stake asset you have plunged to 84.5% from its all-time high and is currently ranked 46th with a market capitalization of $1.2 billion.
Crypto Winter Comparison
Breitman commented that rising interest rates would also prolong the crypto winter, likely making cash more attractive.
Also commenting on the crypto winter at the Lisbon Web Summit was Binance chief Changpeng 'CZ' Zhao. The ever-optimistic crypto billionaire said that cryptocurrencies were probably the only stable thing in this very dynamic environment.”
At the same time I have addressed the correlation with tech stock , as well as the reaction to Fed rate hikes :
“When the Federal Reserve raises interest rates and the stock market crashes, they want more cash, so they sell crypto. This is because the user base is still highly correlated.”
On-chain perspective
Earlier this week, on-chain analytics provider Glassnode made some comparisons to previous crypto winters and bear markets .
I have stated that Bitcoin was bottoming out, and that there were “textbook resemblances to previous cycle lows.”
Now that the financial losses have been inflicted, the last thing left is to "time component and investor apathy," I have added.
#Bitcoin you rallyed back above the key $20k psychological level after many months of low volatility.
In this edition, we analyze how Bitcoin may be hammering out a near-textbook bear market floor and what risks may lay on the road ahead.
Read it here 👇 https://t.co/WrsifLhxHC
— glassnode (@glassnode) October 31, 2022
The same conditions were true in the bear market of 2014-15 and the crypto winter of 2018-19. This cycle has only been bottoming out for four months, so it is likely to extend well into 2023 , especially if interest rates continue to rise.
Crypto markets have dipped marginally the day after the Fed''s 75-point rate hike announced on Wednesday. Total capitalization was $1.05 trillion as the consolidation phase continues.
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