Yesterday saw a cryptocurrency market gain of more than 3% overall, which is remarkable for a time when inflation is high and the global economy isn’t doing very well. Today, those gains came to a halt and the momentum of the crypto market has ceased. The market is seeing just a 1.44% increase overall today.
Was the 3% Gain a Fluke?
While many investors were hopeful that 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 a lot of positive movement in the crypto market since the beginning of the month. That stands in stark contrast to the movement of the crypto market since the beginning of the year.
For instance, Bitcoin (BTC) has dropped by more than 50% over the course of this year so far. Its rate only once moved above the starting point for the year, and it has trended bearish for most of the year.
Ethereum (ETH) is in a similar situation, dropping by more than 50% as well. It started of the year at $3,715 and is now at $1,218. While there have been some bearish arcs during 2022, these have not kept up for long and have obviously not been sustained or the gains retained.
The recent 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 that drop.
This is why the recent 3% gain for the cryptocurrency market sticks out like a sore thumb. It’s most likely an anomaly and little more than a pumping up of a market that is headed steadily downward. It is a stopgap, it would seem, and nothing more.
What We Expect from the Crypto Market
Where is the market headed at this point? I think we have seen the peak of its bullish movement for the moment, and it would appear that the direction is turning as we head into the weekend. Over the next few days, we expect to see the overall market to post losses rather than gains. We may not see all of this week’s gains disappear completely, but some of that will likely dissipate by the time Monday rolls around.
In other words, this is not a fine 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 point when that hits in the coming days.