7 Spanish experts anticipate bitcoin crypto winter end, the one that is overthrowing bitcoin.

” Winter is coming." It is the famous phrase linked to the Stark house of Game of Thrones that has ended up penetrating other areas of society.

The world of cryptocurrencies may well take that concept into account, as many already say that crypto winter has arrived for the sector, with uncertainty about when the light will be seen at the end of the tunnel.

Since November's highs, bitcoin has plummeted by 44%. The crypto asset has gone from trading above $ 58,000, to loitering around the $ 30,000 zone.

How long can this Bitcoin bleeding that has spread to other cryptocurrencies last?

What is the reason for this correction in the sector?

7 Spanish experts anticipate bitcoin crypto winter end

The source spoken with six experts in the cryptocurrency market who assess what the horizon is for the industry and reveal the forecasts from this moment.

For Ismael Santiago, professor, and PhD in finance at the University of Seville and CEO of Olivachain I+D+i, the imminent arrival of interest rate hikes in the United States and the possibility that monetary policy will have to be more restrictive than expected to combat inflation, is causing “a certain panic in risk assets.”

” While cryptocurrencies have been one of the assets with the highest beta during the phases of rises, now they are also presenting the largest falls, " he notes.

” In our view, these declines are motivated by investors 'rotation towards lower-risk assets, by expectations of a setback in central banks' easy-money policies, " says Claudia Giraldo, co-founder of Common-Sense Finance.

The fall, according to Giraldo, is widespread in all types of assets, but it has been especially rampant, in the so-called growth, “with price ratios on profits and sales difficult to justify from a value perspective, among which we could also include cryptocurrencies.”

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Since November 2021, just as the markets began to forecast several rate hikes in the United States and the Federal Reserve began to change its discourse with inflation, bitcoin has been left 50%.

Alberto Fernández, professor of the program specialized in Blockchain and Digital Innovation of the IEB, agrees with the argument.

“The initial catalyst for the falls in the cryptocurrency market was the Fed's announcement to stop eliminating stimuli to the economy, as well as possible interest rises to curb inflation, which causes the balance to have more dollar weight in the portfolio of investors who have cryptocurrencies in their portfolios,” he notes.

The US Federal Reserve's easing of stimuli and tightening of monetary policy are sad news for unregulated markets such as cryptocurrencies. Tapering and rising interest rates could lead to a reduction in global liquidity and ultimately "affect the price of bitcoin," Santiago says.

Cryptocurrencies have proven to be more correlated than ever with the traditional market. This is because, during the last year, institutional investment in crypto assets has increased considerably.

” We have been able to see how some destabilizing elements in the exchange have also had an impact on the cryptocurrency market, " says Ana Elliot, business development director of Coinmotion Spain.

In addition, we must add the possible intention on the part of the Russian government to ban bitcoin transactions and mining in its country.

According to Ramiro Martínez Pardo, CEO, and co-founder of HeyTrade, everything has to do with the correlation between exchanges and bitcoin.

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"In recent days we can see how the evolution of bitcoin, one of the least volatile cryptocurrencies lately, has increasingly followed equities, to the point that the correlation between bitcoin and S&P 500 skyrocketed, when investors swooped,” he analyses.

In addition, the index of fear and greed is close to its historical ground (12 points out of one hundred) and the dominant feeling is “extreme fear”.

However, this index has always been a great indicator of reversal signals, as it shows that many sellers have already left the market. Alejandro Zala, head of Bitpanda Spain says this means that " buyers will soon take over."

Today, indeed, the behaviour of the crypto market is very correlated with the corrective evolution of the main stock indices, as is the case of the North American Nasdaq.

” As long as this correlation is not broken, investment in crypto assets will hardly return to the bullish path, " explains Santiago.

The expert assures that it is critical that the main strong hands of the crypto market return to protect “the support of the $ 30,000 in bitcoin,” as they did well last year.

In the event that this support is pierced down, it will be, he says, “a difficult year for investment in crypto assets, prolonging the crypto winter much more than we all want,” as institutional investment “will go away perhaps not to return,” missing the opportunity to really prove that bitcoin is “digital gold” that protects, as a refuge, from inflation.

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Javier Castro-Acuña, director of management control at Bitnovo is more optimistic about the current situation: “I do not think we are in crypto winter, at least not in the concept of a long season of months and years of downtrend, but in one more correction after having reached a new all-time high.”

Fernandez states that it is highly likely that by the end of February “we will begin to see some recovery in the crypto market,” although it is impossible to “predict accurately.”

"Yes, we can say that the cycles marked with bitcoin by the halving of every 4 years are more cushioned, and that no matter how much each year they try to ban cryptocurrencies, the adoption and general acceptance of the population make it very difficult to curb their inertia,” he says.

"Analysing all the data, it is clear to me that this technology will replace traditional finance and force institutions to adapt and change, so crypto winter can last for 1, 2 months, 1 year or 4 years at most, depending on the global geopolitical and economic situation,” he foresees.

Finally, Giraldo says it is to forecast the durations of the bear markets, although the statistics indicate that these “are much shorter and less pronounced than the bulls.”

The average of a bearish scenario tends to last about 9 months, compared to a favorable market, whose average duration is almost 3 years. "We can expect, as has happened on other occasions, that we will enter a period of high volatility of between 2 or 3 months,” he concludes.

# 7 Spanish experts anticipate bitcoin crypto winter end #