INFLATION
The majority of individuals believe that the current bear market will never end and that both the bull and bear markets will continue indefinitely. That is untrue because bear markets always come to a conclusion, but when? Everyone appears brilliant during a bull market, but when a bear market begins, many investors will face the harsh realities of life. For us to begin witnessing a true bull reverse in the cryptocurrency market, it will depend on what the Federal Reserve does. Everything will return to normal when the Federal Reserve decides to stop raising interest rates, but that won't happen until the inflation rate is under control.
Because JP Morgan is already noticing significant changes in the property market, they predict a downturn in inflation. Although the inflation rate for rent has decreased this year, the inflation rate for oil costs has remained high. There are several things happening in the oil sector, including the Russian price cap in Europe, which will take place in December. The United States has stopped using its strategic reserves, which it had been massively dumping to keep gas prices low before the midterm elections. OPEC has continued to cut production. You should be aware that this will have a significant impact on the price of food and other items.
Inflation might stay higher for a very long period if the price of oil keeps rising, but despite all the bad things happening, we are seeing the opposite, which is that inflation is declining more quickly than anticipated. According to Morgan Stanley, the M2 money supply, which is seriously declining, will be a major contributor to the inflation. The Federal Reserve raised interest rates once more by 0.75%, but it is now old news. The Federal Reserve stated that the next rate increase could be smaller and is probably going to be 0.5%.
The Federal Reserve is still aiming for a rate increase peak of roughly 5%, but that is when inflation can be kept under control. It is extremely possible that the cryptocurrency market will turn around once the Federal Reserve stops raising interest rates. Because energy supplies may not be sufficient to last through the winter, Q1 also happens to coincide with the major crisis that is approaching Europe. This indicates that prices may continue to rise, which will have an impact on the global energy market. All of these events contribute to the uncertainty that the crypto market is going through as we observe sectors like metal smelters being forced to shut down.
Even if 2023 won't mark the beginning of a new all-time high, some people, including financial analyst Morgan Stanley, feel that the bear market will come to an end in that year. The next bull market will come, but it won't be the moon, so the end of the bear doesn't necessarily indicate that prices will soar.
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