Macro factors contributed to the bearishness in the crypto markets, with rampant inflation continuing and the Federal Reserve’s hike in interest rates to control rising prices. But could the suffering see the light at the end of the tunnel for Ethereum [ETH] and Bitcoin [BTC].
Here’s AMBCrypto’s Price Prediction for Ethereum [ETH] for 2022-23
Clouds of concern
For the first half of 21 October, crypto markets looked bleak as BTC and ETH were on the verge of breaking below key weekly support levels. Some altcoins did see some green pastures but not the biggest two cryptos. ETH and BTC planned on taking a different route than the altcoins.
Both Bitcoin and Ethereum saw large transactions that occurred while traders were at a HUGE loss. As per Santiment, Bitcoin saw its lowest ratio of loss vs. profit transactions in 4.5 months, and Ethereum recorded historically lows.
Looking at the graph, the analytical platform added,
“Capitulation signs have been popping up Friday, including transactions from addresses trading out their assets while at a loss.”
Herein, traders opened up massive short positions, as evidenced by the funding rates. Santiment noted that liquidations tend to be common, and surprise bounce could occur in such scenarios. This meant that the market could be in a re-bound state.
Lessons from the past
Both Bitcoin and Ethereum had recent 1v1 confrontation with the said narrative. Consider Ethereum since the Merge, the count of trades on the Ethereum network has been plagued by decline. The removal of these ‘weak-hands’ could indeed aid the network given the capitulation phase.
Bitcoin too rode the same bandwagon. The monitoring resource Whalemap flagged a transaction involving 32,000 BTC. Whalemap was quick to argue an alternative perspective to the classic bear market narrative — major investors capitulating at the lows.
Overall- could this hint at a possible recovery in the bearish market domain? Certainly a possibility here. In fact, at the time of writing, both BTC and ETH saw a small share of uptick in price on CoinMarketCap. BUT again, one has to consider the possibility of yet another corrections.