Is Today’s Crypto Rally The End Of The Crypto Winter Or Only A Temporary Reprieve?

Crypto enthusiasts are hoping this latest rally means the end of the crypto winter. Bitcoin finally broke above $20,000 and stayed there, rising all the way past $22,000 and holding. Meanwhile, ether rose more than 10%, surpassing $1,480.

Bitcoin, Ether Prices Reach Highest Levels In Weeks

According to data from CoinDesk, bitcoin soared to its highest price in over a month on Monday, trading as high as $22,135 at around 9 a.m. Eastern. The cryptocurrency pulled back slightly after that but remained firmly above $22,000 in what’s looking like a critical price movement.

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Within the last 24 hours, bitcoin traded as high as $22,493, its highest level since June 16. Other cryptocurrencies also enjoyed sizable rallies on Monday, as did several crypto-related stocks, including MicroStrategy, which rose about 11%, Coinbase, which climbed about 14%, and Riot Blockchain, which rose more than 17% in early trading.

European and Asian stock markets also rallied, and U.S. stocks added to the growing rally. Cryptocurrencies have become highly correlated with U.S. stocks, especially tech stocks. The Nasdaq Composite and Nasdaq 100 were each up by about 1% in early trading, adding further fuel onto the crypto fire.

Crypto Analyst Predicted Rally

The pseudonymous analyst Kaleo tweeted his prediction of a massive bitcoin bounce to about $28,000 in the short term ahead of another downtrend to under $20,000, followed by a steady march higher to $30,000. However, despite his expectation of a bounce to about $30,000, Kaleo doesn't "see it as anything to get over-excited about quite yet."

He added that even if bitcoin bulls can push a relief rally, he doesn't think the surge will mark the beginning of a bull market. Kaleo advised bitcoin enthusiasts not to let their interest in cryptocurrency "evolve into greed and completely consume you," adding that they should "be patient, keep stacking, survive the crab and be a king in 2024/ 2025."

Are The Crypto Winter And Contagion Over?

Today's rally is significant in its magnitude and the fact that the latest crypto winter had bitcoin off by nearly 70% from its record high reached in November. However, it's too early to know whether the bear market that wiped billions of dollars off of cryptocurrencies is finally over.

The crypto winter pounded the many companies that had been depending on a never-ending rally in crypto prices, resulting in several high-profile bankruptcy filings. Hedge fund Three Arrows Capital and crypto lender Celsius were among those that filed for bankruptcy protection.

Many crypto-related firms took out massive amounts of leverage, leading to their downfall. For example, 3AC took out loans it couldn't pay back when crypto prices collapsed for an extended period.

Additionally, Celsius offered yields greater than 18% to crypto owners who deposited their tokens on its platform and allowed them to be loaned out to others willing to pay high interest rates. The crypto lender engaged in high-risk trades to earn the interest it needed to pay its users back.

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