Is Crypto Volatility Over for 2022?

Over the past few weeks, many crypto analysts have claimed that the prices of the world’s largest and most mainstream assets have become “boring” in many ways. Bitcoin, for example, has seen a real dip in its volatility over the past month or so, and the asset continues to hover at around $20K. Sometimes it’s slightly up and sometimes it’s slightly down, but the range has remained relatively consistent.

Could Volatility Finally Be Standing Still?

This has been the sentiment for some time, though now these same crypto analysts believe the industry is going to endure a serious shakeup, and prices could experience higher levels of volatility than what traders have seen. In reaching the end of the year, many are under the impression that the Fed is going to hike rates once again, and another 75-point jump could occur prior to the final days of 2022. Should this happen, crypto prices may be affected.

Crypto expert Wendy O – founder of Crypto Wendy O Media – stated in a recent interview that each time the Fed has decided to hike rates, the digital currency space is negatively affected, and she doesn’t see any reason for this trend to finalize itself. She commented:

Until proven otherwise, I think bitcoin and Ethereum will retrace approximately 85 percent. That places Ethereum around $750 and bitcoin around $10,000. Obviously, those aren’t exact targets. I just think that we are going to get another drop down.

Laura Shin – host of the crypto podcast “Unchained” – also threw her two cents into the mix, stating:

There are certain people who want to hold crypto for the long term. Over the last decade, there have been several new people that have gotten into crypto and really believe in it, and so those are probably the ones who are helping to keep the price steady at these levels.

While she’s making no guarantees, she believes there is enough activity occurring in the crypto space to keep prices relatively stable for the rest of the year. She said:

The number one biggest driver of the deflation of the crypto markets over the last year is the macro environment. [This is] because there’s high inflation and because some people believe we might see a recession. There’s a lot of people who don’t want to have their money in speculative assets. Crypto would fit in that bucket.

The Future Remains Unset

Wendy O also said it’s hard to know what will happen in the future, mentioning:

It’s hard to speculate that far out, and the reason why is we don’t know what type of regulation we’re getting. Speculating on what’s going to happen that far in advance is doing a disservice to people because it might not hit what we’re predicting. Bitcoin might get across with ESG regulations or environmental regulations like all kinds of other stuff.

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