Crypto Recovery Rally is No More! But What Caused the Disruption?

The on-setting of another crypto winter can stop the crypto recovery rally at the end of 2022

The highly volatile crypto market has started experiencing some hard and drastic crypto crash with popular cryptocurrencies like Bitcoin or stablecoins like Tether and Terra. The crypto crash season started in 2022 and reached its highest peak from May to July 2022. Crypto investors are stuck in-between waiting for a crypto recovery rally or set to incur huge losses in this bear market rally. But crypto recovery rally helped Bitcoin to reach US$24k from US$17k in 2022. Thus, crypto investors are highly disappointed that the crypto recovery rally has stopped occurring in the crypto market post-crypto crash ecosystem. Let's dig deep into the causes of disruption in the highly volatile crypto market.

Crypto investors were coping with the crypto winter season due to several crypto crash cases. The improvement in prices of Bitcoin, Tether, Ethereum, and many more provided hope to crypto investors that the drastic period of the crypto crash is getting over through this crypto recovery rally. But the bear market rally has been successful in creating tension among crypto investors.  Long-term crypto investors hold onto their cryptocurrency assets with faith in a crypto recovery rally.

There are multiple cryptocurrency projects from Ethereum, Shiba Inu, Cardano, and more that are helping in improving the current prices. But crypto investors have the understanding that the crypto market is nowhere near the status of crypto market in 2021. Meanwhile, some crypto analysts have analyzed that cryptocurrency liquidity has started recovering as the market cap of stablecoin has stopped dropping in the crypto market. It is still down by around 20% from the all-time high range. Still, the pause in the crypto recovery rally has started tightening the financial conditions for crypto investors. It has been speculated that the situation will be hard for the cryptocurrency cycle to the bottom level without fiat leverage growing.

It has been speculated that the crypto market still will need two to three months to gain a more stabilized situation for crypto investors. It is because another crypto winter with crypto crash cases can be set in for popular cryptocurrencies. Thus, crypto investors can prioritize budget, and savings, create diversified portfolios and make smart investment decisions with cryptocurrencies and possibly incur losses.