Cryptocurrencies have been battered in recent weeks, tracking losses in equity markets amid widespread sell-off hinged on inflation and central banks’ monetary policies.
The crypto market’s total market capitalization has dropped from $3 trillion in late 2013 to $1.7 trillion currently. Since November, the market has seen a decline in value for most cryptocurrencies.
But despite the bearish outlook across the markets, crypto analyst Justin Bennett believes that the bull market isn’t done yet.
In comments shared as Bitcoin and other crypto-assets battled to bounce from this week’s lows, Bennett noted that it’s possible for “one more melt-up” before another correction takes over. Bennett sees this scenario occurring in the second half of 2022, or early next year.
“I don’t think the crypto bull market has ended. Markets don’t crash when everyone expects them to, and right now, everyone expects it,” the analyst said.
The idea of the #cryptoThe bull market is over.
Markets don’t crash when everyone expects them too, and everyone is expecting it right now.
My base case calls to have one more meltdown in this year and then a correction in late 2022 or early 2023.$BTC
— Justin Bennett (@JustinBennettFX) January 26, 2022
Bennett, whose commentary came in the wake of the US Federal Reserve’s latest monetary policy meeting, believes the US central bank might not be as aggressive as suggested after the FOMC meeting.
He looks at a scenario where the Fed could be “strong-armed” if the stock markets continue to sink deeper into correction territory. In this situation, the central bank could seek market stability rather than aggressively pursue its tightening cycle.
It’s an outlook the analyst says could result in fresh volatility short term, suggesting there’s a chance markets run up before tanking again. He says the market should be in for “an interesting few months regardless.”
Bitcoin, which had fallen to $33,000 on Monday, has since recovered and traded at around $37.100 on Friday. Bennett says that the current recovery could see BTC/USD reach resistance at the $40,000-42,000 region. If the market does not fall below $35k, it could open the door to a new downturn of $30k-$28k. The psychological $20k is the next demand reload area.
According to CoinGecko data the flagship crypto is down almost 8% and 46% respectively since its October peak of $69,000.44.
The native token on smart contracts platform Ethereum was Ether (ETH), and plunged to lows as low as $2,100. However, it recovered. The crypto is now hovering at $2,431, nearly 20% lower than last week’s peak of $48,878.