The crypto bull run has been going strong for months now, but when will it end? Here’s what some experts are saying about the future of the cryptocurrency market.
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It’s been a wild ride for the cryptocurrency market over the past few months. After a prolonged period of stability, prices have taken off once again and reached new all-time-highs.
This bull run started in November 2020 and picked up even more steam in December, with Bitcoin surge past $20,000 per coin. Ethereum, Ripple, and other large coins have also seen significant gains.
The question on everyone’s mind is when will this run end? When will prices start to stabilize or correct?
There is no easy answer to this question. The cryptocurrency market is still young and volatile, meaning that it can be difficult to predict what will happen in the short-term. However, there are some factors that could point to a slowdown of the current bull run.
One factor to consider is the amount of money that has flowed into the market in recent months. A large influx of capital can often lead to a sharp increase in prices, as happened in late 2017. This is followed by a period of consolidation as the market digests these gains.
Another factor to consider is the current technical setup of the market. After such a sharp rally, it’s not uncommon for prices to fall back and consolidate for a period of time before resuming their upward trend. This could mean that we see some correction in the near future before prices start climbing again.
Of course, predicting the future direction of the cryptocurrency market is notoriously difficult. So far, this bull run has confounded many experts and analysts who thought it would end much sooner. Only time will tell how long it will last and where prices will go next.
What is a Crypto Bull Run?
A crypto bull run is when the prices of cryptocurrencies increase rapidly for an extended period of time. This can be caused by a variety of factors, including increasing demand from investors, positive news about the development of a particular cryptocurrency, or a decrease in the supply of a particular cryptocurrency.
When will the Crypto Bull Run End?
Bitcoin and other cryptocurrency prices have been on a tear over the past year, but some analysts believe the market is due for a correction.
Here’s a look at what could trigger a sell-off in digital assets, and how deep the pullback could be.
What Could Spark a Crypto Sell-Off?
There are several near-term catalysts that could send Bitcoin and other digital assets lower in the coming weeks and months.
For one, the SEC has yet to approve a Bitcoin ETF, which many investors see as a key step in legitimacy for the young asset class. A number of highly anticipated ETF filings have been withdrawn or delayed in recent months amid concerns from regulators.
Another potential negative catalyst is increasing regulation of cryptocurrency exchanges in Asia. China, South Korea, and Japan – three of the largest markets for digital assets – have all cracked down on exchanges in recent months, imposing strict know-your-customer (KYC) rules and banning anonymous trading.
These crackdowns could lead to decreased trading activity in Asia, which could put pressure on prices.
How Deep Could the Pullback Be?
While it’s impossible to predict exactly how far prices could fall during a sell-off, some analysts believe that Bitcoin could drop as low as $5,000 per coin before finding support. That would represent a more than 50% decline from current levels.
Other analysts are more bullish on Bitcoin’s short-term prospects, but still believe that a pullback is likely. Tom Lee, head of research at Fundstrat Global Advisors, recently revised his year-end price target for Bitcoin down to $25,000 from $20,000 but still believes that the long-term uptrend remains intact.
No one can say for certain when the current crypto bull run will end. However, there are a few possible scenarios that could trigger a sharp price decline.
Firstly, a major exchange could suffer a hack or security breach, leading to widespread panic and selling. Secondly, governments could crack down on cryptocurrencies, making it harder to buy and use them. Lastly, the development of a superior technology could make Bitcoin and other cryptocurrencies obsolete.
Of course, it’s also possible that the bull run will continue for some time yet. Until there is a clear sign that the market is about to turn downwards, it’s best to remain cautious and not invest more than you can afford to lose.