Where is the cryptocurrencies market heading in 2022?

The cryptocurrencies market is going through a tough time at this moment and it is really difficult to make any money out of this market. Every cryptocurrency is in deep red. After reaching the all-time high of $69000, Bitcoin has lost almost 50% of its value and is trading at around $37000. It has support at $33000. The Bitcoin recently touched that support level and bounced back. Still, if you have started investing 2 or 3 months back, you must be sitting at a loss of around 30%. You should understand that 20, 30, or even 50% reduction in your cryptocurrencies portfolio is ok(I would not say normal). There is one thing about cryptocurrencies, they recover fast.
2022 has not been a good year for cryptocurrencies investors. The entire crypto market is dominated by bears. The cryptocurrencies market is moving in a range-bound manner. Long and Shorts both the calls are liquidated. So if you are in margin trading, you should stop doing it for the time being. There are many news that may negatively affect the cryptocurrencies market. Let’s take a look at where the cryptocurrencies market is heading in 2022:
Inflation is at an all-time high. High inflation reduces the purchasing power of people. As a result of which, people will spend more on their basic requirements and less on investments. Since investment in cryptocurrencies is the riskiest investment, many people may shy away from investing in cryptocurrencies.
Federal Reserve is also expected to hike rates. The rate hike may take place five times during 2022. This may result in people investing more in traditional means of investment rather than cryptocurrencies.
Recently, the Indian Government has legalized investment in cryptocurrencies. Any gains by selling cryptocurrencies are taxed at 30%. Although a 30% tax on gains is a bit on the higher side it will remove the fear of Indian people from investing in cryptocurrencies. The Indian Government has also announced that Digital Rupee will be launched sometime in 2022.
Cryptocurrencies are gaining wider adoption now. They have reached a point where they cannot move in an opposite way to other investment means. We have seen those times when the share markets all over the world were going down and cryptocurrencies were going high. Now they both are moving in the same direction.
2022 is not going to be as good as 2021 for crypto investors. All the blue-chip cryptocurrencies made investors rich in 2021 by delivering 10x or more returns on investments. Still, we hope things will be good in 2022. At least we hope Bitcoin and other cryptocurrencies reach their all-time high again. The overall market capitalization of cryptocurrencies may reach again $3 trillion. But this is not going to happen soon. Bitcoin needs to break $40000 for the bulls to take charge and we have seen Bitcoin struggling in 2022. But since many new investors are coming, we may expect things to get better. The future is certainly bright for cryptocurrencies but you should choose where to invest wisely. Stay away from scam coins and Ponzi schemes. Do your complete study before investing in cryptocurrencies.
Where do you think the cryptocurrencies market is heading? Tell us in the comment section.

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