Will Bitcoin and Cryptocurrency Find Its Footing After a Deep Downturn?

Despite the recurring notion that “Crypto is dead,” many investors and enthusiasts have been banking on its inevitable rebound. While this prediction has 19,282 previous instances of resurrection, there are now compelling reasons to believe that Bitcoin and other cryptocurrencies might see a significant turnaround in the near future. Will they finally reach their potential when Bitcoin’s price hits an impressive $300,000?

Markets are Absolutely Bullish: Here’s Why

There are currently 11 key factors shaping the crypto landscape, with 7 bullish and 4 bearish. Let's explore what lurks behind these figures.

Top 10 Richest Rich People and the Stock Market Highs

First and foremost, the Top 10 richest billionaires own 90% of the currently held market stocks. These individuals have seen their wealth skyrocket since the stock market is now only 20% below its all-time high, currently around $100 trillion. It’s a remarkable resurgence compared to the 1928.29 pre-Depression period. Modern-day stock owners not only have the financial backing but also a burgeoning interest in cryptocurrencies, particularly among millennials who are likely to pour their stocks into crypto if it can offer them higher returns in the current market context. The sheer power of these top-tier investors cannot be overlooked, as even a fraction of their wealth would be a significant boost for the crypto industry.

Geopolitical Factors and International Relations

Another crucial factor involves geopolitical dynamics and international relations. The 2023 elections are still a month away, and with President Biden's re-election on the horizon, there's a strong need to keep stock markets stable to secure public support. During election years, governments like to present positive economic news to maintain voter confidence. In August 2023, Federal Reserve (Fed) Chair Jay Powell openly stated that the central bank's primary focus is on fostering economic growth, bolstering stock markets, and maintaining employment rates.

The Next Bitcoin Halving

Also, a 1.5-year countdown to the next Bitcoin halving looms over the market. The halving is an event predicted to trigger price appreciation, often resulting in an increase of 200% in the year preceding the halving. Cryptocurrency traders and bulls will be watching this event with bated breath, as it could signal a monumental shift in market sentiment.

Entering Bear Terrain: The Risks Persist

However, it's not all rosy. The charts are dotted with 4 bearish factors that could impact the market.

The Fed and Deregulation

The Federal Reserve has initiated a significant enforcement of monetary policy, sourcing a staggering $90 billion monthly from the economy. This reduction in liquidity is a formidable challenge for any bullish market, making it crucial to carefully predict how it will affect demand.

Consumer Cautiousness and Stagflation

Consumers have grown more prudent with their spending, driven by concerns over a potential recession. This trend is likely to dampen corporate revenues and wealth accumulation for billionaires, thus affecting the overall investment climate. Additionally, stagnating inflation continues to hit the lower-middle class, exacerbating economic inequalities. With 40% of the population fell into the paycheck-to-paycheck category, and expenses far outpacing savings, the economic landscape remains unpredictable and challenging.

Striking a Balance: Factors in Conflict

When wrestling with these significant forces, it’s impossible to choose winners and losers with certainty. However, the network effects of the top 10 richest investing in crypto and the impact of the Federal Reserve’s monetary policy will play significant roles. Both sides have the potential to swing the balance, depending on how they intertwine.

Conclusion: The Impending Merge as the Tipping Point

While the final outcomes remain uncertain, the upcoming Ethereum merge appears as a catalytic event. If the 13,000 ETH daily selling pressure (worth $20 million) is effectively mitigated, this could have a profound impact on the market, akin to a 3 Bitcoin halving. This event will provide a crucial turning point, signaling whether the bullish forces can overcome the bearish ones.

In all, the crypto market's tug of war between bullish and bearish factors is heating up. The duty of the investment community and crypto enthusiasts remains to decipher these complex dynamics and act accordingly, waiting for the next chapter in this fascinating narrative of growth and uncertainty.