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When Will Crypto Recover? Investors Want to Know as 2021 Threatens to Close With a Crash.

InvestorPlace - Stock Market News, Stock Advice & Trading Tips When will crypto recover? Investors are clamoring to know when crypto will have its comeback streak, and the answer could...

This story originally appeared on InvestorPlace

InvestorPlace - Stock Market News, Stock Advice & Trading Tips - InvestorPlace

The holidays are looking increasingly sad for crypto holders. Crypto price charts are showing too much red and not enough green in recent weeks; Bitcoin (CCC:BTC-USD) prices dropped over $20,000, and altcoins have halted from their bullish tears and are nursing their wounds. When will crypto recover? It’s a question everybody is asking, especially as 2022 opens itself up to be a year of inflation and interest rate hikes.

chart of cryptocurrency
Source: Shutterstock

There’s no doubt about it; cryptocurrency will not be disappearing any time soon. Even in the midst of corrective periods, the asset class is proving all too valuable in terms of providing services. Cryptos may explode, others may die off and drop to $0, but there will always be digital currencies. This is all to say that a bear market might be inevitable, but it won’t be the end for crypto.

But, with this in mind, when is the recovery of crypto prices likely to happen? Of course, every investor is hoping for a bounce-back sooner rather than later; macroeconomic factors point at 2022 being a hard year for the asset class; these investors want the rebound to be as soon as possible.

A pseudonymous crypto influencer who goes by the name Light is providing some technical insight into Bitcoin to help answer the question of, “when will crypto recover?” As they argue, the time is coming very quickly, and it’s almost entirely dependent on bears running out of steam.

When Will Crypto Recover? A Top Analyst Argues Soon as Bears Slow on Selling.

As Bitcoin runs into its most major volatility since early summer, its holders are taking whatever profits they can. This is in turn driving Bitcoin prices down further. And, as has been proven time and time again, Bitcoin prices reflect the shape of the entire market. As the crypto whose market capitalization makes up nearly 50% of the entire asset class, a downturn in BTC prices leads to a downturn in crypto prices; whether or not the market recuperates can then be reflected in a Bitcoin upswing.

Light posted a series of tweets over the weekend discussing Bitcoin’s recent behaviors and the bears’ selling of assets; Light says that bears are the only thing holding BTC prices down at the moment. Indeed, analysis by the influencer shows massive influxes of selling around the time of BTC’s $69,000 all-time high; they say the objective market participants were unfazed by the prospects of further gains as bulls momentum finally started to wane.

“The selling weighed on an already sagging market,” Light says before also comparing the behavior to that reflected in equity short-selling in 2021. They justify the comparison by evidencing both markets as illiquid and absent justifiable fundamental values.

So, what’s the timeline for new gains? Well, Light says it could be as soon as investors wrap up their New Year’s festivities. Indeed, the influencer claims that with a vast majority of these sellers coming from Asia, new 2022 crypto regulations could spawn an upswing. Indeed, with a pair of major exchanges barring Chinese citizens from trading due to government regulations, these sellers will be strong-armed into not selling any longer. Thus, the influencer predicts “blue skies” early into 2022.

On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

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