Is the crypto market at risk of winter? A comparative analysis with 2022

Source: CryptoTrend Original Title: Cryptocurrency Market Conditions Are Similar to Early 2022, According to Report Original Link: The overall cryptocurrency market conditions are similar to those seen in early 2022, the year of the crypto winter, according to a recent report by Glassnode. The analysis is based on several arguments that reflect some particularly similar conditions in both scenarios.

This means that the outlook for the crypto world currently does not look the most favorable. One of the most emphasized points of the report concerns the high risk of capitulation among the most significant investors. According to the tools of the cited portal, the activity of the largest buyers is cooling down, leading to a retracement reflected in Bitcoin’s price.

Glassnode’s supply-side cost tools based on quantiles show a decrease below 0.75 since mid-November. A similar drop in 2022 marked the beginning of the devastating bear market, or winter, that shook the cryptocurrency market that year.

However, it should not be overlooked that the weakness of the crypto market in 2022 probably would not have resulted in winter if not for key elements like the collapses of Terra and FTX. These precipitated the overall crash, suggesting that current conditions are not identical if the spectrum is considered more broadly.

Is the cryptocurrency market heading towards a winter?

Although winters or bear markets are part of the nature of the crypto world, it is unlikely that the sector is approaching such a scenario now. According to some experts like Tom Lee of Fundstrat, the fundamentals of the leading cryptocurrencies remain solid.

This means that both small and large players are advancing in crypto adoption across all scales. From stablecoins, real-world asset tokenization, and other forms of blockchain utilization, these are common elements among major Wall Street firms. Even artificial intelligence companies are betting on the machine economy with cryptocurrency solutions.

All these factors imply that the market is far from a bearish catalyst like Terra or FTX. On the contrary, crypto companies are at a moment of great relevance, as they are closely examined by major financial, technological firms, and even governments around the world.

Meanwhile, regulations are moving in a favorable direction. Essentially, instead of capitulation, 2026 will likely be marked by mass adoption with the regulation of stablecoins entering the scene in the US.

In conclusion, it can be said that the possibility of a winter in the cryptocurrency market should not be ruled out. However, the probabilities of it happening appear to be very remote.