Several crypto firms and financial institutions have collapsed in the wake of the latest crypto winter that was quite severe. The collapse this month of Silicon Valley Bank and other banks that cater to crypto clients seemed like another instance of bad news for a crypto sector that has seen more than its fair share of bad news in the past six months.
But, the banking crisis appears to have come with a silver lining. Based on data from Apptopia, downloads of crypto apps have spiked by over 15% while those of banking apps have dropped nearly 5% during the same period.
Various crypto firms have welcomed a sigh of relief after Bitcoin took to an upside momentum that has pushed it to nine-month highs in recent days above $28,000.
After a rough and challenging series of dips and downturns, the crypto market is now recording a bullish momentum on the back of relaxed global macroeconomic headwinds and cooling inflation. The global crypto market capitalization has already crossed the $1.1 trillion mark, supported by high and stable trading volumes.
Bitcoin and Ethereum are the poster boys of the crypto space and they have shown incredible stability and managed to trade in a positive range ever since the start of the month. Experts are expecting the rally will continue even in the coming weeks because of a slight indication to ease in macroeconomic conditions globally and mostly in the major markets of the UK and the US.
As the crypto market adopts a bullish trend, operators in this space are enjoying better returns on investments with even Bitcoin mining becoming more profitable.
Crypto Markets Are On A Recovery Road
In general, the wider crypto market gave a new pump in 2023 with major coins appearing to take the lead. Bitcoin rebounded steeply and traded near the $23,500 level with a positive change. From its lowest level in 2022 – $15,523, reached on November 9, the flagship crypto recorded almost 40% gains in January 2023. It reached a 30-day high of $23,954 on January 29, 2023.
Since then, Bitcoin has gained more value and as of March 21, 2023, BTC is trading above $28,000. The wider crypto market is trading ‘green’, adding much to the delight of crypto operators and investors.
All major cryptos faced a huge correction until the end of 2022, after the collapse of the FTX crypto exchange in November 2022. The market ended last year with a staggering approach. Nonetheless, it is clear now that the bulls are back and strongly running the show in 2023.Buy Bitcoin Now
How Did The Crypto Market Turn Bullish?
The crypto market has already recorded lots of positive signs because of the easing macroeconomic activities that have resulted in the latest price rally. Furthermore, the general trading volume of the crypto market has recovered to levels that were not seen since June 2021.
This rally in the crypto market was mainly seen, as soon as the U.S. Federal Reserve decided on a 25 basis points (bps) rate instead of a 75 bps hike amid cooling inflation, coupled with a recovery in GDP numbers and solid employment data.
It was expected that the Federal Reserve might adopt an aggressive approach and may settle on a 75 bps interest hike. Therefore, the current interest rate hike of 25 bps has been welcomed with a positive note by crypto market participants, implying that the Fed may be now on the winning side in its fierce battle against inflation.
Moreover, the rate hike decision has majorly affected the US dollar as well and weakened it to a huge extent, as the weak dollar has always underpinned the price of cryptos.
Not just the United States market, but many macroeconomic factors have also shown some recovery signs in China and other major global economies. Apart from all these factors, the reopening of China’s borders after nearly three years of the pandemic-related closure and efforts by other central banks to fight inflation has improved the sentiments in the entire Crypto market.
Crypto Market Capitalization
|November 10, 2021||$3 trillion- All-time high|
|November 21, 2022||$727.58 billion|
|February 3, 2023||$1.09 trillion|
The past six months have been a roller coaster ride for the crypto market. Because of extensive global uncertainties and FTX implosion, the markets were hit worse. However, things are looking up in March and the operators in the crypto space are relieved by the Bull Run.
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