2022 has been very bearish for the crypto market; Bitcoin and Ethereum hit their all-time highs around late 2021 and are now more than 50% below their prices. There have been crashes and plunges after plunge, leaving Q2 and Q3 as bad times for the crypto market.
Historically, Bitcoin, the most popular commodity cryptocurrency, has changed the lives of those who trade it. The exchange rate versus the dollar rate was below $3000 five years ago, and it has increased progressively over the years; Bitcoin hit a new all-time high price in 2021 but also experienced big drops.
Ethereum is the second most significant and most popularly used cryptocurrency. The price of Ethereum increased exponentially in 2021, as it hit its new all-time high rate around late 2021 and then hit its lowest point of $900 in June of this year.
What the Future Looks Like For Bitcoin
Bitcoin, the largest cryptocurrency by market cap, is a good indicator for the crypto market. The market tends to ride its trends, there was a surge in the price of Bitcoin in 2021, and it went over $68,000 last November, setting another new all-time high cost; however, this record was short-lived as it all came crashing down in Q2 of this year, since its record-setting price, it has dipped as low as $20,000 in recent months.
There are a couple of reasons that could be behind the decline in the price of bitcoin; one of the significant suspected causes is actions being taken by the U.S Central Bank to rein in inflation. And this has had a remarkable effect on all altcoins. The rise in interest rates lessens the demand for growth companies like tech stocks and speculative risk assets like cryptocurrencies. The volatile nature of the altcoins also affects their standing as they become high-risk options in times of instability.
The question is, how high can bitcoin go again in the long term? Experts believe this is a behavioral norm for bitcoin, with its character being “short-term volatility followed by long-term growth.
What the future holds for Ethereum
Ethereum is the second largest cryptocurrency and most popular altcoin in the market, it follows the trend of bitcoin sometimes, and like bitcoin, it serves as a good indicator of the crypto market.
The growth of Ethereum has been progressive over the last few years from its launch price of ($0.311 – $4800,) its latest all-time high in the Q4 of 2021.
Ethereum, unlike Bitcoin and other cryptocurrencies, is utilized as a software network that allows developers to build and grow new tools, apps, and NFTs, the many applications of the blockchain-based software network have helped it to hold ground over this past year. However, with Ethereum’s transition to a less energy-intensive version commonly known as “The merge,” there is a chance it may become much more appealing and sustainable for widespread use. For Ethereum to rise again long term, an improvement in demand and functionality would determine it.
Regardless of the decline in Ethereum’s price over the few months, its ROI is still around 300% at an annualized rate. This indicates that early investors have tremendously increased their investment yearly since 2014. Although its current price is a world away from its all-time high speed, there is room for tremendous growth in its worth in the remainder of 2022.
After gaining a lot of ground during the pandemic period and becoming a fallback system for a lot of investors in late 2020 and most of 2021, the bullish crypto run seems to have ground down to a halt, and whether a run like that would occur in the next few years is anybody’s guess. Crypto enthusiasts believe there’s still more to expect from the altcoins, and most investors are banking on behavioral analysis of the cryptocurrency, using bitcoin as a tracking guide.
Bitcoin has had a progressive pattern over the years, growing in a “short bearish run” followed by a “massive bullish run,” constantly gaining ground. There are reasons to believe that after this dip, the price would skyrocket as always does eventually.
Ethereum could potentially round up this year with a bang, and if it reaches critical support and bounces off it, it could hit $4000 again and set a new all-time high by the end of the year.