When will the crypto market recover?

Summary

• Bitcoin and Ether have witnessed two bearish crossovers in the last two months. 
• The crypto market is likely to continue on this downside trend through the summer. 
• The top cryptocurrencies, however, still hold three-digit one-year growth.  

In the light of regulatory actions and China’s crackdown on crypto mining firms, the cryptocurrency market has lost as much as half of its valuation from its one-year high.

The market’s experts, on the other hand, believe that the current crypto prices are consolidated, and that the digital currency market is on its path to maturity. 

The crypto market is also expected to recover once its mining operations go green. Tesla (US:TSLA, NASDAQ:TSLA) may also resume payments in Bitcoin once it becomes at least 50 per cent greener. 

A larger mainstream acceptance could bolster sustainable recovery in the crypto market. Bitcoin and other altcoins have witnessed an 80 to 90 per cent plunge from their all-time highs and the crypto market is likely to have a bearish curve through summer as its mining operations undergo transition.

Bitcoin charts have been showing a bearish crossover trajectory that may continue through August. The largest crypto’s market valuation stands at US$ 1.34 trillion, representing a flat pattern as compared to the May 19 crypto crash. 

Bitcoin’s one year price performance against moving average multiple and volume. (Source: Refinitiv)

From June to date, Bitcoin has recorded lower trading volume and dropped below its moving average multiple, showing a short-term downtrend. Its present market cap is US$ 613 billion, as against US$ 1.2 trillion in mid-April.  

Despite the recent downside trend, Bitcoin's token still records a one-year growth of 251 per cent. The largest crypto token has also gained 13 per cent year-to-date (YTD). Considering these metrics, some Bitcoin miners and institutional investors remain bullish on the cryptocurrency’s future.

Ethereum, on the other hand, continues to hold an impressive year-to-date growth of 166 per cent. It has climbed more than 730 per cent in the past one year. The much-awaited launch of Ethereum 2.0 could help the most utilized cryptocurrency grow further by the next quarter. 

Ether’s one year price performance against moving average multiple and volume. (Source: Refinitiv)

Ether has been testing its 200-day moving average that could also decide its long-term price pattern. Presently, the crypto market is bearish, and high speculative trading may backfire. However, historical data favor a sharp recovery by the end of this year. 

The current price consolidation and low volatility trends have also impressed the US regulators, who have to take a final decision on Bitcoin and Ether funds listing. This decision could be a game-changer catalyst for the overall crypto market. 

The above constitutes a preliminary view and any interest in stocks should be evaluated further from investment point of view.