Is the bear market coming to an end? Discover the top indicators to look out for in this informative article and get ahead of the game.
The world of cryptocurrency is often a volatile world, with unpredictable fluctuations and sudden changes in value. Since arguably the fall of UST, the crypto world has been in a long and harsh crypto winter.
Although it might take a long time (between 2-3 years) since the bull market is coming back, how do you exactly know when the bull is coming? Well, there are actually a few indicators to watch for that most investors are not in tune with.
Here are three indicators that could signify the bear may be leaving the stage.
The first is a significant increase in trading volume. This is a sign that more people are starting to buy and sell cryptocurrencies, which can help drive up prices.
If you start to see a steady increase in trading volume over several days or weeks, it could be a sign that the bear market is coming to an end. It’s much more reliable to look at volume as a solid indicator rather than simply looking at price as a bull market indicator.
Correlation Between Cryptocurrencies
Another indicator to watch for is a decrease in the correlation between different cryptocurrencies. During a bear market, many different cryptocurrencies tend to move in the same direction, as investors become more risk-averse and look to sell off their assets.
However, as the market starts to recover, you may start to see some cryptocurrencies moving independently from one another. This can be a sign that investors are starting to pick and choose which assets they want to invest in, rather than just selling everything off at once.
Although there might be exceptions to this such as the case with GameFi, as indicated by its growth during this bear market season. For NFT games, there are special cases when a game’s fun factor is so strong, players continue the usage the product despite a sharp decline in token profitability.
Institutional Interest in Crypto
Finally, you can look for signs of institutional interest in cryptocurrencies. As we’ve mentioned before, institutional investors can have a significant impact on the crypto market, and if they start to show more interest in cryptocurrencies, it could be a sign that the bear market is ending.
For example, if you start to see more institutional investors buying up Bitcoin or other cryptocurrencies, that could be a sign that the market is starting to recover. However, it’s also important to take notice of which institutions are exactly trying to take notice.
For the Metaverse, we have seen Facebook-turned-Meta make huge investments towards web3 virtual reality, only to end up having to cut costs for its ambitions.
Of course, these indicators are just a few of the many things to watch for when determining if the bear market is ending. There are many other factors that can influence the crypto market, and it’s essential to do your own research and analysis before making any investment decisions.
However, by paying attention to these indicators, you may be able to get a better sense of when the bear market is finally coming to an end and start to take advantage of the many opportunities that the crypto world has to offer.
Edmond is a passionate writer for Video games, GameFi and Web3. He has worked for top GameFi companies and video game/crypto news websites.