3 Reasons Why Crypto is Breaking Out and the Rally Might Have Legs
The bullish breakout in crypto that started last week has seen investors beam with hope for a sustainable recovery. Bitcoin (BTC) and other cryptocurrencies struggled throughout 2022 amid internal and external uncertain events.
The crypto market's initial pullback between November 2021 and April 2022 did not worry investors much, as it was seen as a natural retracement from all-time highs. However, the collapse of TerraUSD (UST) in May, a once thriving algorithmic stablecoin from the Terra Luna (LUNA) ecosystem, changed the course of the market from a pullback to a full-blown bear run.
Several companies exposed to UST could not survive the crash, including Three Arrows Capital, Celsius Network and Voyager. Many people lost their life savings, setting crypto years back.
Fast forward to November 2022, another crypto giant filed for bankruptcy amid a disastrous collapse. Sam Bankman-Fried's FTX exchange faced a liquidity crunch after reports of an unhealthy financial relationship with its sister company Alameda Research.
Crypto turned bloody again, with Bitcoin price plunging to November 2020 levels at $15,466. Ethereum, the second-largest crypto, slipped below support at $1,100, hitting a four-month low of $1,075.
Crypto experts believe that 2023 is unlikely to be the year we see a massive bullish turnaround, with some predicting the crypto winter to last until December. However, there are some key factors behind the spike in crypto prices, especially among altcoins, since last week.
Bitcoin price blasted above $17,000 on Monday, reaching a three-week high in what market watchers believe was a response by investors to signs of easing inflation. Altcoins also posted significant gains, with Ethereum increasing by over 4%.
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