Cryptocurrency news portal reports:
The past few months have been challenging for cryptocurrencies.
Although the price of BTC has not fallen significantly from its all-time high, the prices of many altcoins have dropped by more than 60-70% over the past few months.
Why has this happened?
I believe there are several reasons:
US and German governments are selling off BTC
The BTC repayment from Mt. Gox will begin this month
(Counting billions of dollars in BTC to be distributed to its users)
Historically, summer has been a season of poor performance for cryptocurrencies
The upcoming physical ETF for Ethereum
(Although its launch is generally considered bullish in the long term)
will unlock $9 billion in ETH from the Grayscale Ethereum Trust
Historically, halving has always been an event with short-term bearish news
—the last cycle, BTC consolidated horizontally for 5 months after the halving
I think the main reason for the continuous selling by so many people, with seemingly no buyers, is that there is no major catalyst for cryptocurrencies in the short term.
Does this mean the bull market is over? I don’t think so.
In the fourth quarter of 2024, we have many bullish catalysts, including the Federal Reserve’s rate cut, the US presidential election (historically favorable for cryptocurrencies), and the FTX cash repayment.
I believe the FTX repayment is particularly optimistic because $16 billion in cash will be distributed to former FTX users—and many of them may reinvest this money in cryptocurrencies.
Don’t forget, when BTC was valued at about $20,000, FTX collapsed. At that time, most of those investing in cryptocurrencies on FTX were crypto natives, who were optimistic about the long-term prospects of the industry.
However, there are still several months before the FTX repayment.
As I said, in the short term, I do not see any major bullish catalysts.
I expect the market to continue to fluctuate this summer, with an upward trend resuming at some point in late summer or early fall.
This does not mean it is a good idea to sell all cryptocurrencies now and then try to buy them back at a lower price. I do believe we are closer to the bottom than the top.
But when the bottom will be reached is still uncertain. Despite the likes of self-proclaimed masters trying to sell such dreams: it is entirely possible to predict this point.
For my part, I believe it is a good time to accumulate high-confidence coins, which is what I am doing now.
Ultimately, patience and faith will, as always, be repaid.
