Based on the crypto market price fluctuations, enthusiasts and skeptics alike have been closely monitoring the market’s volatility and the end of the most prolonged crypto winter. The crypto market has experienced several booms and crashes, and this period of turbulence has been termed the crypto winter.
The red market that has been witnessed since late last year is almost over, according to insights from Morgan Stanley Wealth Management.
The crypto winter covering the bearish market may be thawing. This can be attributed to several factors that affect the digital currency market. Bitcoin’s price may have bottomed out, indicating an end to its bearish trend. A bull run is expected to inflate the entire crypto market, reaching new heights in the coming future.
Bitcoin bottomed out – Morgan Stanley Wealth Management
Morgan Stanley Wealth Management is the US asset management unit for the Morgan Stanley US-based bank. The organization has recently posted a report that focuses on the possibility of an end to the crypto winter market. The end of the bearish market could ignite an uptrend for digital currencies, especially Bitcoin.
According to the Morgan Stanley Wealth Management firm, “Current data indicates a high probability of the end of the crypto winter and the imminent arrival of the crypto spring.” The post on Tuesday recorded, “Based on current data, signs indicate that crypto winter may be in the past and that crypto spring is likely on the horizon.”
The organization analyzed data from the previous Bitcoin winters, concluding its price reaches its bottom level after a peak within 12 to 24 months. Bitcoin reached its peak in November 2021, valued at $69,000, and later hit its bottom support in November 2022, a year later.
A strategy at the Morgan Stanley organization explained how the bearish market would come to an end, basing his comments on previous market data. Denny Galindo, the organization’s strategist, commented, “A price increase of over 50% in Bitcoin is usually an indication that the bottom has been reached.”
According to his analysis, the largest crypto has experienced a rise of over 70% since the start of the first quarter this year and 77% since its previous bottom last year. The bottom recorded about $16,000 in November 2022.
Galindo also noted that the previous price troughs based on Bitcoin’s drawdowns were about 83%
What triggers the crypto winter end?
According to Galindo, most of Bitcoin’s gains come immediately after block rewards obtained from its 4-year halving. The bullish market begins with the bitcoin block halving event with its rewards and later ends as the BTC reaches its previous peak.
The halving after every four years awards miners for successful Bitcoin block mining and the rewards are reduced by half after every halving event. As such, Bitcoin’s inflation is controlled and reduces the pressure on the digital currency. The next halving event is set for 6 months from now, in 2024.
Galindo further explained, “The scarcity created by restricting the supply of Bitcoin can affect its price and potentially trigger a bull market.” He elaborated that the previous three halving events have influenced the bull market since Bitcoin’s inception. The spikes and fluctuations occur after every block reward halving, with a timeline between 12 to 18 months.
Based on the report by Morgan Stanley Wealth Management, the end of the crypto winter might be fostered by institutional adoption, growing regulatory clarity, crypto’s evolving use case, and the growing market cap.
The report suggests that the crypto market has journeyed from its initial hype-driven phase toward a utility-focused phase. As the adoption of crypto grows, the digital currency market is set to face a bull run, ending the crypto winter.
