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What is crypto winter in the cryptocurrency market | Trends

The fall these days of bitcoin, which led to the loss of its gains in recent months, unraveled a concept with which describes the cooling sustained by the collapse of prices of crypto assets: the ‘crypto winter’.

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The concept was incubated in 2018 to refer to the drop in the price of cryptocurrencies.which at that time reached the historical maximum of 80%, a trend that lasted for a while and that only until 2019 did it begin to show signs of recovery and stability.

Due to the recent losses of bitcoin, the issue resurfaced. However, it seems early to say that this market is in the state of ‘crypto winter’, since although the main cryptocurrency fell below $30,000 on Tuesday, as 29,764 dollars depreciated, a level not seen since July 2021, this trend is still not sustained over time.

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Experts believe that this drop is part of a market trend away from risk assets due to the uncertainty of the war in Ukraine, but it is not clear how long it can last.

The decline of the sector is linked to the prudence of investors due to fear related to the war in Ukraine, the lockdown in China and the adoption of a restrictive monetary policy in the United States.

This trend also affects the stocks of technology companies, whose performance has benefited from expansionary monetary policies during the pandemic.

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“Bitcoin’s correlation with the Nasdaq”, the US tech stock index “is at its maximum”, the specialized blockchain analysts of the Kaiko portal highlighted.

Given the volatility of crypto assets, it is difficult to project what the evolution of bitcoin will be.

In 2021, bitcoin temporarily fell below the $30,000 threshold in June and July, before picking up steam again to hit its all-time high in November at $69,000.

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