It is very disappointing to most cryptocurrency investors across the globe that the crypto market has not yet recovered from its bearish trend and has even brought more devastating low prices that have left many in shock.
The trending topics of discourse on the media and off media have centred on predicting how long the bear market will last before it recovers and prices move back up again, but these predictions may unlikely not be the solution to the bear market as it is practically impossible to predict the bottom.
It is however better to channel this energy somewhere else that will bring a solution to the current situation. Instead of predicting when the bear trend will end, it will be more pragmatic to explore the events that can pull out the crypto market from the bear position and put it on the next up cycle.
After all, market predictions have not always been so accurate in the past, due to some unpredictable factors that may alter the market trend.
Let’s discuss five events or factors that can pull the current crypto market out of this bear trend.
5 Events That Can Change The Bear Crypto Market
Considering the potential impact of these five events on the crypto market, the crypto market will experience a change from a bearish trend with low prices to a more bullish trend with higher prices.
1. A Successful Ethereum Merger:
For the past 5 years, crypto enthusiasts have anticipated a new development in the Ethereum community which is the transition of the Ethereum network from proof-of-work to proof-of-stake.
Even though this plan has been afflicted by a lot of setbacks, the official switch is closer than ever after the merger trial was completed on the public test network, Sepolia.
With the hype around the Ethereum merge, it is very possible that the merge can change the bearish state of the crypto market if the transition can be launched without a hitch and in turn, solves the scalability and slow user experience problem.
This event will likely lead to speculations amongst investors and also some media rumours which will pump the prices due to the euphoria in the air. The prices will fall again after the state’s global financial system comes back to the forefront.
This merger is scheduled to take off in August 2022.
2. The Fed Reverses Course:
The federal monetary policies are a major factor that affects the crypto market.
There is a common expression used by traders that says “Don’t fight the Fed”. This is used to express one of the most influential forces on world monetary markets.
The U.S Federal Reserve has been operating on straightforward cash insurance policies and near-zero rates of interest for some years but later permitted an interest rate hike of 0.25% which is the first in more than three years.
The Fed had also permitted two further charge hikes of 0.5% and 0.75% which brought the benchmark interest rate to a spread of 1.5% to 1.75%.
Risk assets, including Bitcoin, were falling in worth during this time.
The rise of cryptocurrency and legacy markets which was witnessed in 2021 was a result of the straightforward cash insurance policies of the Fed and there’s a high possibility that a return to such policies will drive funds into the crypto ecosystem.
3. Approval Of A Spot Bitcoin ETF:
Another event that could cause a turnaround for the current bear crypto market is the passage of a spot Bitcoin exchange-traded fund(ETF) for United States markets.
In 2017, the first Bitcoin ETF proposed by the Winklevoss twins was denied by the United States Securities and Exchange Commission(SEC). Ever since then, there have been consistent rejections for any physically-backed Bitcoin ETF brought forward.
The reasons for the rejections have revolved around the impression that cryptocurrency markets are vulnerable to manipulation and there’s no security for investors.
However, if this spot ETF is approved, it will make Bitcoin a more legitimate currency that will be adopted by institutions and the government. This will change the current market situation as new funds flow into the market.
4. Adoption Of Bitcoin As Legal Tender:
In 2021, El Salvador led the way as the first country to adopt Bitcoin as a legal tender, after which the Central African Republic (CAR) followed suit in April 2022.
This is a good major win for the crypto community as the dream of cryptocurrencies being adopted as legal tender in the world begins to come to reality.
Though this has been done to promote the mainstream acceptance of Bitcoin there’s no doubt that this will change when big economies like China, Japan, Germany etc openly accept crypto as a legal tender.
Recently, unprecedented developments are pushing many governments to take shocking decisions and it’s not out of the possibility box that these big economies will adopt Bitcoin as legal tender which will increase currency flow in the market and turn the tide of the bear market.
5. Integration As A Payment Option By A Large Company:
Imagine what will happen in the market when big companies like Amazon, Apple, Google etc integrate blockchain-based payment systems into their payment system.
One of the major excuses people gives as to why they don’t use their cryptocurrencies to make purchases is that they are not accepted everywhere.
Though there are options available to access the value of crypto one has, such as debit cards and online payment integration with platforms like Shopify, the ability to make purchases on a blockchain network is limited.
World richest man Elon Musk once said that the mere mention of blockchain-based payment integration can spark a market rally for such a token.
On the speculation of this big announcement, the crypto market will likely be pulled off the bear trend to a bullish trend.
In summary, the crypto market is an unregulated one which is driven by a lot of factors, including some unforeseen ones.
The above-mentioned events are likely to enact a change in the current bear market but it doesn’t necessarily mean that they will have an impact on the market.
However, the occurrence of any of the above events will bring new hope to investors and get them ready for the next line of action.