The current outlook of the digital currency market ecosystem is considered a promising one for investors, who have been repositioning their mindsets for a long ‘crypto winter’ ahead.
For the first time in a few weeks, the combined crypto market capitalization temporarily climbed above the $1 trillion level over the past weekend, a sign that implies a massive recovery may be underway.
While investors may be very happy with this trend, a major question then surfaces: Does this recovery imply a return to the bullish green days?
A Yes and a No Answer
There are different kinds of investors in the crypto ecosystem nowadays; these classification includes those who are in it for a quick profit and those in it for the long term.
In answering whether the 5.56% weekly growth in the price of Bitcoin to $21,248.76 implies a recovery, those in the ecosystem for the short term will largely say Yes, as this aligns with the sentiment and desires a lot. The opposite holds through for those in the game for the long term.
Shunning sentiments now, Bitcoin and the broader crypto ecosystem is now to historically record periods of correction, either on the uptrend or downtrend, depending on the prior movement of the asset. This means if we record a period of massive price growth such as that that was seen when BTC grew to its All-Time High (ATH) above $68,000 back in November last year, a period of bearish correction followed, thus fueling the drop to $47,000 level when entering 2022.
Historically, the current growth might just be the expected response to the massive plunge in the ecosystem these past days, ignited by the collapse of UST and LUNA, as well as the insolvency fears of the crypto lender Celsius Network. Should this be seen as a mere bullish correction, then the crypto winter is still ahead, and caution must be exercised before making any active investment decisions.
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