Bear Market: Is the bear market back for good and how long will it last?

At one point, it looked like the bear market that had taken the major cryptocurrencies to rather dangerous lows was over, and a new trend of stability was ushered in that could soon turn into growth for the market, but it seems that the trend has changed again.

It is clear that 2022 was not one of the most successful years for crypto-currencies, especially when compared to the previous two years, when at that time the price of bitcoin, even though it had fallen significantly, had already reached several quite high peaks. But since the inauguration of 2022, things have gone from bad to worse for investors, which has put them between a rock and a hard place.

Bearish sentiment hit the market again. This sentiment had been building since the beginning of the year, but it wasn’t until mid to late May that the downtrend finally kicked in, leaving crypto-currencies at dangerous lows.

But as expected, the crypto-currency market is still experiencing considerable ups and downs. After a significant drop in late July and early August, the price of some crypto-currencies began to rise. This led to renewed optimism in the market, but the good times did not last as long as expected.

Pessimism has returned to the market

After a few days of bullishness, things seemed to be looking up. Although the increases in some crypto-currencies were fairly muted, they set a precedent important enough to make projections. Some analysts claimed that an upward trend was on the horizon in the medium term, but it seems that these predictions will not come true as pessimism has returned.

Until August 19 of last year, the good times that began to emerge in the market at the end of July were quite positive. But that trend changed with the return of pessimism. While it was too early to be sure that the market was going to turn around, it was in fact a possibility, which we now know will not happen, at least not now.

During this short period of rise, the price of Bitcoin and Ethereum rose, but now the fall has come. This has resulted in the wiping out of millions of dollars from the overall market price, which may have something to do with the somewhat restrictive monetary policies.

Looking at the current prices of Bitcoin and Ethereum, they are quite close to monthly lows, which has put investors at risk once again. Undoubtedly, this news is not very positive, as the price decline could extend much further, leading crypto-currencies to experience new and quite dangerous lows.

What is the cause of the fall?

As usual, the fall in the price of crypto-currencies is related to multiple factors, but different analysts have claimed that the global economy has a lot to do with the current price of crypto-currencies.

What happened in August, when bitcoin almost reached $25,000, was thanks to the rebound in levels at the end of the month, but in August, the performance was much weaker, because the global economy was also weaker.

Right now, what is happening in the global economy directly affects the state of crypto-currencies. Tensions in the world are still high, the war between Ukraine and Russia has continued to be problematic for the economy, and the United States is a big part of it.

The truth is that investors have more and more to worry about every day. For some, not liquidating their positions is a difficult decision. As prices fall, it is quite common for many investors to decide to flee in an attempt to protect themselves. Although during downturns many investors still try to enter the market to buy at low prices, the global economic situation has not allowed them to do so.

It should be noted that even though the market is experiencing a high level of bearish sentiment, this does not mean that this trend will continue. As quickly as the market has entered this sentiment, it is possible that optimism will return soon.

The point is that for the good days of the market to return, the conditions must be right. If the state of the global economy does not improve, the chances of the market improving are as slim, if not slimmer, than they are now. That’s why some analysts say the trend could continue for a few more months, and of course, if that happens, new lows will be a reality.