In brief
- Digital assets rallied on Tuesday after falling significantly a day earlier.
- Last week, 30% of Myriad users expected a crypto winter.
- Bitcoin is down about 27% since hitting an all-time high above $126,000 in early October.
As Winter Storm Chan barrels down on New York, Myriad prediction market traders are issuing a more favorable forecast for crypto prices.
Users on Myriad, which is owned by Decrypt parent company Dastan, rate a 9% chance that markets are headed for crypto winter. That’s dropped from 30% since the market debuted on Friday at the end of a week in which Bitcoin hovered around $85,000 much of the time–not far off its six-month lows.
The improvement dovetails with rebound in crypto prices on Tuesday after a more than six-week slump. BTC was trading above $91,500, up 6% over the past 24 hours, although BTC remains about 27% lower than its all-time high above $126,000 set in early October, according to crypto price aggregator CoinGecko.
Ethereum was trading for $2,990 at the time of writing, a 7.3% gain since Monday, same time. On Wednesday, the Ethereum developer community rolls out the Fusaka upgrade, which will dramatically change how the mainnet collects and verifies data from layer-2 networks. ETH is off more than 20% over the past month.
For the purposes of the prediction market, three out of the following four criteria would need to be met to qualify as a Crypto Winter: Bitcoin drops to $35,000; Ethereum drops to $1,000; MicroStrategy, or MSTR, falls to $50; or the Crypto total market capitalization on TradingView would need to drop to $350 billion.
More generally, a crypto winter describes an extended market downturn when prices drop, trading activity slows, and investor interest cools for months or even years.
The most recent crypto winter ran from late 2021 through most of 2023, triggered by the bursting of the pandemic-era bull market and worsened by the collapses of Terra/Luna in 2022, and the resulting contagion that triggered the failure of crypto hedge fund Three Arrows Capital in June and crypto exchange FTX in November that same year.
During that period, Bitcoin fell from an all-time high near $69,000 in November 2021 to about $16,000 after FTX’s failure—a drawdown of roughly 75%. Venture funding and trading volumes dropped dramatically, too.
But even if crypto winter isn’t on the horizon, Bitcoin and Ethereum have incurred recent price weakness.
Analysts at QCP Capital, a Singapore-based crypto trading firm, pegged Monday’s dip to hawkish sentiment from Bank of Japan Governor Kazuo Ueda.
As a result, “Japan’s two-year yield to 1% and [implies] a 76% chance of a rate increase at the 19 December BOJ meeting,” the analysts wrote. Traders are also keeping an eye on the U.S. Federal Open Markets Committee as it heads into its last meeting for the year.
Analysts told Decrypt that the U.S. central bank’s interest rate decision next week will be a huge determining factor in how Bitcoin ends the year.
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