Yesterday, the cryptocurrency market gained over 3% overall, which is remarkable at a time when inflation is high and the global economy is not doing very well. Today, those gains have stalled and the momentum in the crypto market has ceased. The market is only seeing an overall increase of 1.44% today.
Was the 3% gain a fluke?
While many investors were hoping yesterday’s gains were a sign that the market and the economy were improving, that doesn’t seem to be the case. We have actually seen many positive movements in the crypto market since the beginning of the month. This stands in stark contrast to how the crypto market has evolved since the start of the year.
For example, Bitcoin (BTC) has fallen over 50% in this year so far. Its rate exceeded the starting point of the year only once and it followed a downward trend for most of the year.
Ethereum (ETH) is in a similar situation, also dropping more than 50%. It started the year at $3,715 and is now at $1,218. While there were some bearish arcs in 2022, these didn’t follow for long and obviously weren’t sustained or the gains held.
The recent stock market crash last month has made things even more dire, and there is still a long way to go for most cryptos to rebound from this drop.
This is why the recent 3% gain for the cryptocurrency market sticks out like a sore thumb. This is most likely an anomaly and little more than inflation of a market that is steadily heading down. It is a palliative, it seems, and nothing more.
What we expect from the crypto market
Where is the market headed at this point? I think we’ve seen the peak of its bullish movement for now, and it looks like the direction is turning as we head into the weekend. Over the next few days, we expect the overall market to post losses rather than gains. We may not see all of this week’s gains completely disappear, but some of them will likely dissipate by Monday.
In other words, now is not a good time to invest unless you plan to play a long game and expect the market to pick up somewhere down the road. Otherwise, we suggest you wait for the drop and buy at the low when it comes in the next few days.