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Have Bitcoin and Ethereum Prices Bottomed Out? What Experts Say | NextAdvisor with TIME

after a turbulent year, bitcoin and ethereum prices are improving. But some experts aren’t ready to say investors are immune from recent price swings.

The two largest cryptocurrencies are still 50% below their all-time highs at the end of last year. however, in typical fashion, the crypto market rallied significantly in July, with the price of bitcoin rising more than 30% and ethereum rising 70% since the market crash in June. could that indicate to investors that bitcoin and ethereum have already passed the lowest price points of this cycle?

Reading: Experts. bitcoin isnt going

Since Thursday, bitcoin was inching toward $25,000 and ethereum was above $1,900, following the release of July inflation data and new progress on ethereum’s massive software upgrade. inflation eased somewhat from historically high levels in July, which in turn led to a rally in the stock and crypto markets. ethereum, in particular, gained momentum this week after developers successfully completed another test on one of its testnets, called goerli. the test simulated a process identical to what will happen on the ethereum mainnet in a month.

But some experts remain skeptical about what the recent price increases might mean in the long run.

“In fact, the Fed is still tightening and inflation is still high, so we can’t be convinced of a market reversal at this time,” says Marcus Sotiriou, market analyst at digital asset broker GlobalBlock. “but the fact that [fed chairman] jerome powell has started saying that rate hikes have had a noticeable impact tells me that we’re in the latter stages of this bear market, which we’ve been in about eight months” .

have bitcoin and ethereum prices bottomed out?

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Bitcoin and Ethereum have gained positive momentum for a few weeks now. While the rise in bitcoin and ethereum prices has been impressive, cryptocurrencies’ ties to the stock market could be a sign of future volatility.

The stock market had its best performance since 2020 in July and continues to show gains in August, so it could be argued that cryptocurrencies are currently benefiting from the rally in stocks, says scott sheridan, chief executive officer of the firm. tastyworks brokerage. By the same measure, if stocks weaken again, cryptocurrencies are likely to follow.

“I’m not sure I’ve seen the bottom,” says Sheridan. “I think if you start to see the market give up some of the recent gains, you’ll probably see something similar in crypto.”

crypto educator and market analyst wendy o is also unconvinced that bitcoin and ethereum have reached their lowest prices of this cycle so far. she or she says the market will see a “true capitulation later in the bear market,” which they believe will last another year or two. capitulation is the time when investors lose all confidence in the outlook for prices, even after they have crashed. these images show what the capitulation of bitcoin and ethereum could look like over the next year, according to o.

Although cryptocurrency prices are impossible to predict with any certainty, signs point to bitcoin and ethereum retreating past their June lows of $17,500 and $900. continued economic and political uncertainty could create even more market volatility in the coming weeks or months.

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“In previous bear cycles, both cryptocurrencies have corrected by 85%,” says o. “I anticipate bitcoin to hit $10,000 and ethereum to hit $750.”

what should crypto investors do amid continued volatility

The only thing guaranteed when it comes to crypto investing is volatility. Almost a year ago, the price of bitcoin reached $68,000 and is now below $25,000.

These continuous fluctuations are a good reminder that not everyone has risk tolerance with cryptocurrencies. If you are curious about cryptocurrencies, keep in mind that investing in cryptocurrencies is extremely risky and you should allocate only 5% of your investment portfolio to crypto assets. even then, only do it if you have a high risk tolerance. There is no guarantee that you will make any money, or even get back the money you invested in the crypto market.

Only invest what you’d be okay to lose, and only after your other financial priorities are in order, like saving for an emergency, paying off high-interest debt, and contributing to a traditional retirement plan.

The fluctuations of bitcoin and ethereum so far this year show the extreme volatility facing crypto investors. If you are interested in investing in cryptocurrencies or if you have already invested some money in bitcoin, experts recommend not to panic about short-term fluctuations and instead focus on long-term growth potential.

See also: 25 Car Dealers That Accept Cryptocurrency | Car Companies Accepting Bitcoin as Payment

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