The crypto market has experienced a significant decline in 2022. By the end of November 2022, the market had declined by more than 70% from its previous peak in November 2021. Just when crypto enthusiasts thought they had seen it all, the FTX crash pushed the market dip even lower. With the heavy negative sentiment in the market, many wonder what the fate of the crypto market is and what to expect in 2023.
3 Reasons Crypto Will Recover in 2023
Let's look at the reasons why the crypto market will recover in 2023.
1. The Crypto Market Has Experienced Significant Dips in the Past
Bitcoin, the most popular cryptocurrency and the largest in terms of its market cap, has gone through significant bear markets and dips.
Bitcoin’s price rose to around $1,160 on November 30, 2013, it then had a significant price fall, which lasted for more than a year, and by January 2015, 1 BTC was selling for $150. In 2017, BTC’s price broke the last high formed in 2013 and went on that year to reach a new peak at around $19,600. By December 2018, the price of Bitcoin was already trading at as low as $3,100.
In December 2020, the price broke the resistance formed in 2017 and formed higher highs until it reached $68,000 in November 2021. Since then, we have seen significant dips in the market, which have also been followed by much more negative sentiment due to people getting more involved in the crypto market.
Looking at Bitcoin price history, we may conclude that the current situation is only a case of history repeating itself, and we expect the price to start recovering in 2023.
2. Every Bitcoin Bear Market Has Been Followed By a Long Bull Run
If you still consider the Bitcoin price illustration we made in the first point, you will discover that the crypto market is a very volatile one, and significant price reductions are followed by a major increase in price. You will also notice that the bull rallies that proceed the bear markets also last for a long time and eventually break through the resistance created by the market's previous highest price.
The wild price trends are not only evident in the Bitcoin market. However, we put more emphasis on Bitcoin because its price movement has a significant effect on the price of other cryptocurrencies. More so, Bitcoin dominance significantly affects crypto market sentiment.
3. Growing Crypto and Blockchain Use
There are now more projects and acceptance for cryptocurrencies than in past years. Look at the gaming industry, for example, where cryptocurrencies are reducing the need for middlemen by cutting out the need to use debit and credit cards to make payments. Players also earn crypto rewards while playing games—thanks to cryptocurrency and blockchain technologies.
The banking industry has also been affected by crypto and blockchain technologies. More financial institutions and major companies are accepting Bitcoin than ever before.
It is obvious that crypto and blockchain use cases have increased, and they are more accepted than they were a few years ago. For these reasons, the bear market is not expected to linger for too long, and a progressive recovery is expected in 2023.
Will Crypto Rise In 2023?
Being patient and playing the long-term game can help you come out strong from the ongoing crypto winter. Don't expect to recover all your money quickly, as it takes time for the market price to build up. Many spot traders lose a lot of money during bear markets, but the patient ones get to recover some, and even all, over time. Being patient and disciplined helps keep your emotions and judgment in check.
But will crypto rise in 2023? That's anyone's guess.
The information on this website does not constitute financial advice, investment advice, or trading advice, and should not be considered as such. MakeUseOf does not advise on any trading or investing matters and does not advise that any particular cryptocurrency should be bought or sold. Always conduct your own due diligence and consult a licensed financial adviser for investment advice.