The crypto market has endured declining prices and valuations since the turn of the summer, with Bitcoin and Ethereum valuations plummeting.
However, this ‘crypto winter’ that investors are facing ‘could be over’. This was inferred by Oanda’s Senior Market Analyst, Edward Moya, when he spoke to CoinDeskTV.
Moya affirmed that the current economic situation, particularly within the United States, has majorly contributed to the market’s downturn, with soaring inflation and price hikes.
“Right now equity remains in tact. It’s going to be a bumpy ride, for most likely a few more months. We’re going to need a better macro outlook, you’re going to see a lot of choppiness here,” he told CoinDeskTV.
“Investors are going to wait and see how aggressive how the fed will be on tightening this and can we have a consensus agreement on how high rates will go that will help show signs if Bitcoin has bottomed out. There is optimism prices will stabilise.”
This current crypto winter has displaced trust from potential investors, with a lot of uncertainty surrounding the market. This was compounded when Bitcoin fell below $22,000 (£18,599) last Friday, the lowest price drop since 27 July.
At its lowest this summer, the popular cryptocurrency dropped as low as $18,332 (£15,499) on 18 June, a stark contrast to the $35,747 (£30,218) it was trading at a year prior on the same date.
In order to stabilise Bitcoin and cryptocurrency prices, Moya highlights that the US Federal Reserve System (‘The Fed’) must reign in control of inflation. This in turn may see a rise in buy-and-hold strategies (‘HODL’ or ‘Hodler’) which would signal a possible green light that the current crypto winter may be over.
Moya said: “The fed has to get inflation under control and you’re going to see them remain very aggressive for the rest of the year.
“You’re going to see Bitcoin wait to see when will the feds soften their stance on tightening, that will be the green light on what a lot of investors are looking for.
“I think you’re seeing that more of the hodler money is starting to increase their exposure and add to their positions. There is a chance that the crypto winter could be over.”
Bitcoin’s current price at the time of writing is $21,391 (£18,083), down -0.57% for the day.