How Long Will The Bull Market Last – Crypto Winter Coming?

After dropping to lows of $40K in September, the Bitcoin has climbed to the highs of $61K. Currently, Bitcoin is only $3000 away from reclaiming its all-time high.

While these market bulls create excitement, there is also fear that the bullish rally will not last, and a crypto winter could be on the way. When the market bulls were last reported earlier this year, the market sharply corrected in May, with Bitcoin losing nearly a third in value. Hence, is it possible that a similar scenario will occur after the bull market hits its peak?

The Current Bullish Rally is Different

There are several differences between the current bull market and previous ones. Firstly, institutional investors have flooded the market. Unlike previous bull markets, this one has mainly been attributed to the buying habits of institutional investors, who are accumulating large Bitcoin holdings.

Institutional investors who are buying Bitcoin are doing so because of increased demand from their clients. There is a minimal chance that these players can trigger selling pressure because most of them are HODLers. Hence, the current bull market could progress into the future and crypto winter could not be on the way.

Secondly, China is no longer a crypto player. After mining firms migrated from the country due to a regulatory crackdown on mining, crypto exchanges are also now leaving the country. In May, the Chinese ban caused a deep price correction, but the market now seems to have recovered and is no longer reacting to these bans.

In September, China reminded its citizens that crypto trading and mining were illegal. Unlike previous scenarios where such news caused price crashes, Bitcoin rallied by around 25% a week after the announcement. This reaction shows that the bull market will progress because such disruptions can no longer happen.

The current Bitcoin rally to highs of $61K has been attributed to speculations of a Bitcoin futures exchange-traded fund (ETF) being approved by the US. A recent report cited sources close to the Securities and Exchange Commission (SEC), who stated that a Bitcoin futures fund would be approved next week.

This news has caused a major rally because it is a step forward in the US crypto regulatory framework. It is the first time that the US is approving such a fund; hence we could see the market bulls holding due to an influx in demand from those who want to get exposure to Bitcoin through these funds.

These factors demonstrate that the current bull market is different from the ones seen in the past. The crypto space has evolved, and the growing adoption and positive regulatory framework could play a major role in enabling the current bull market to hold, and Bitcoin could reach $100K as earlier predicted.

Is Crypto Winter Coming?

Crypto winter is one of the worst market phases that cryptocurrencies can enter. During a bull market, external parties who only want to make profits and do not understand crypto join the space. Usually, buying pressure from these parties triggers a bullish rally.

However, FUD causes these players to rush into selling their holdings, causing a major price dip. Besides, prices could also stagnate after such selling trends because such holders no longer accumulate. Crypto winters have happened in the past, but it could not happen this time due to several factors.

First, the bullish rally has not been attributed to new retail traders. A recent report from Google Trends showed that search terms for “Buy Bitcoin” were at their lowest point. This shows that the parties buying now are large buyers, institutions and players who have been in the market for a long time.

The current population holding Bitcoin has a minimal chance of selling. A recent Glassnode report showed that the long-term holder supply shock had reached an all-time high. This metric shows that long term holders are not selling. If these players continue holding, a price correction or crypto winter could be far from happening.

With most factors favouring a bull market, and this rally being different from previous ones, a crypto winter could not be in the way. Besides, with crypto going mainstream, more institutional and large players could join the rally.

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