Last Updated on 42 mins by cryptoevent

With the bear market finally showing signs of an end, many crypto investors are wondering what the near-term state of the market will be.

There have always been bear and bull markets. They are a staple in the world of investing. A bear market is defined as a fall of 20% or more from recent highs, while a bull market is a rise of 20% or more. There is no exact science to predict the end of a bear market and the start of a bull market in any asset niche, and crypto is no exception.

Until recently, there has been little to no major upward movement in crypto prices. Technical indicators for most of the coins in the market have also signaled the bearish narrative. But the way the market looks, a number of analysts are saying that the cryptocurrency bear market may finally be over.

At the start of the month, bitcoin is up over 8% for the first time since hitting a recent low of $19,111 on Wednesday, July 13. This is a significant development because Bitcoin stuck in a sustained downtrend. Other altcoins like ETH and ETH classic have also increased at an above-average rate in the same period. while tThese crypto assets have not significantly cleared the resistance levels created during the bear market of 2022 and may not do so for a while, it appears that the cryptocurrency market has regained bullish momentum.

There were several factors that could account for the recent uptrend. One is that the global economy has received some positive news in recent weeks, including a drop in oil prices and lower unemployment rates.

Economic Data Boosts Crypto

Any discussion of the cryptocurrency market and how it is behaving right now is not complete without a parallel discussion of the stock market, as crypto has indeed taken its cue from the stock markets this year. It should come as no surprise, then, that the recent bearish reversal in crypto coincided with another fall in stock markets.

However, both the stock market and the crypto market have seen some improvements recently. These are laying the groundwork for a broad market rally and one that would pave the way for the return of the stock and cryptocurrency markets to more bullish highs. If the stock market rally continues and leads to recession avoidance, it is possible (if not likely) that crypto prices will also start to rally. Investors who were spooked by the sharp drop in asset prices may feel more confident about buying again, and this could lead to increased demand for Bitcoin and other cryptocurrencies.

What comes next will be interesting to see how stocks and bitcoin react to the recent reversal. If the stock markets can hold their ground or even break ground, it could bode well for crypto. But if stocks continue to fall, that could put additional pressure on Bitcoin and other crypto digital assets

Data from AI CIO shows that BTC price correlation with the S&P 500 and Nasdaq 0.59 and 0.82 respectively in May 2022, this correlation value approached an all-time high. Just as these two indices have fallen in 2022, so has Bitcoin and other cryptocurrencies.

To put it more bluntly, the same forces that drove stock market prices down also pulled crypto asset prices down. But now that stocks have started to rally, it’s possible that crypto prices will do the same.

Could the stock market avoid a recession?

Recessions are caused by a number of factors, but one of the most important is a stock market crash. When asset prices fall sharply and rapidly, it can trigger a domino effect, leading to business closures, layoffs and a drop in consumer spending. The last global recession was triggered by the collapse of Lehman Brothers and the subsequent financial crisis.

The stock market has had a rollercoaster ride in recent months but is still well above its March lows. If it can continue to hold up or continue to rise, a recession could be averted.

However, there are signs that the stock market can avoid a crash, even if all speculation remains cautious. New technical indicators suggest that the global market economy may have turned around. More specifically, technicals suggest a recession may not materialize and even if it does, results are unlikely to be as harsh as previously feared.

Given this data, investors are turning to Bitcoin and other digital assets as a potential safe haven asset. The logic is that in the event of a stock market crash, Bitcoin will continue to appreciate as people seek alternative investments.

Remaining uncertainty in crypto

Combined with technical indicators all saying that crypto has already bottomed, these fundamentals are certainly pointing to a brighter future. However, there is still uncertainty in the air. The bear market has taken its toll on crypto investors and many people have lost money. This is likely to lead people to become more cautious and invest less heavily in digital assets in the future.

It is also unclear whether the current rally will be sustainable. The bear market has lasted for over a year and it is possible that we could see another sell off before the bull market really gets going.

Investors should therefore be careful and not put all their eggs in one basket. Diversification is key, and investing in a mix of assets is always the best strategy. On balance, the bear market may be over, but it’s too early to say for sure. Crypto investors should be careful and not invest more than they can afford to lose.

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