Cumberland foretells ‘Eventual Up-Trend’ after Volatility. 

  • The Crypto industry has been battling collapses and crypto winter throughout 2022.
  • A lot of liquidity is at the mercy of bankruptcy courts. 
  • Mass adoption and increasing traffic can cause an uptrend. 

Chicago, Illinois-based Crypto asset trading firm Cumberland DRW LLC recently took a closer look at the crypto market during and after the FTX collapse and found interesting details.

Cumberland went on Twitter on December 12, 2022, and shared its findings, 

The trading company said that after a very busy month, the price action is in a consolidation state. And considering the nature of crypto and paradigm shifts currently happening in the industry, there are rare chances of them lasting for long. This could be because the market participants have many variables to deal with, as liquidity and volumes have dried up, and the market is operating near its yearly lows. 

It may be because of ‘Christmas blues’ or something else, but dozens of crypto companies are either struggling to survive or have thrown the towel in the ring. The future of the industry appears bleak. 

“prices have reached a surprisingly buoyant equilibrium which is well off the lows of the year.”

The explanation of this difference of opinion is the key to the prediction of price action. Answering the question as to why the industry is in this place, that too after a dream run in 2021. 

The Crypto market has spent the majority of 2022 fighting major collapses and crypto winter, which created the liquidity crunch, lack of cash flow, and the majority of players leaving the arena. 

“In the wake of billions of dollars’ worth of those liquidations and trillions of dollars of lost market capitalization, the next leg of price action… depends upon … whether or not there are further firesales to come.”

There are a lot of portfolios under the bankruptcy administrator’s control, and there is no time limit set as to when shall it come out in circulation. Hence it becomes obvious that the crypto market is fighting a deficit and not a surplus. 

FTX, Alameda and other entities who have filed for Chapter 11 bankruptcy might have done it as a last-ditch effort to extend their stay in the arena. 

Anticipating 2023, the adoption shall lead the market recovery. To better understand the situation, China and Russia, along with some other countries, are slowly deregulating BTC and major entities with billions of users shall continue onboarding. The Volatility of crypto assets has been drawing the attention of both retail and institutional investors. 

The crypto trading company said that they do not foresee the continuation of these situations. On the other hand, they look forward to volatility as the market resets itself. Blockchain technology upgrades itself; this could then be followed by an up trend.