July was the best month of 2022 for Bitcoin, but that doesn’t mean much

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Cryptocurrency prices had a great year in 2021, but plummeted in 2022. Many investors are overwhelmed, meaning their coins and etons are now worth less than they paid for them. In fact, many cryptocurrencies dropped 90% from their highs in what many observers refer to as “crypto winter”.

In July, Bitcoin (BTC) posted its largest monthly percentage gain this year. Nonetheless, the US Federal Reserve’s decision to raise interest rates by a further 0.75% and fears that the economy could slide into recession. Does that mean the worst is over? Has cryptocurrency finally hit rock bottom? Let’s find out

Best Bitcoin month of the year

After a terrible June, Bitcoin’s price jumped 18% in July, the largest percentage increase since the beginning of the year. Earning 18% a month after losing 38% is definitely better than digging into further losses. But as the chart below shows, Bitcoin has yet to start reversing its June losses.

Furthermore, it must generate 65% to reach the value in late January. The major cryptocurrency is struggling to hit the $ 25,000 mark and is worth a fraction of its all-time high. Many analysts remain cautious on August, which has always been a bad month for cryptocurrency prices. In short, it is still early and we have not yet crossed the threshold.

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What does this mean for investors?

Some investors are hoping for a recovery in cryptocurrency prices to ease the stress of further portfolio declines. Others want to buy low, but this can be a dangerous investment strategy. Not only is this nearly impossible to achieve, but it can mean that investors stay on the sidelines indefinitely, still hoping for their price. In any case, many factors can influence prices. But it is also possible that some of them have received an award.

For example, we don’t know what the rise in regulation will look like and what impact it will have on the market. It may take some time to rebuild trust in the post-terrestrial market (LUNA) and cryptocurrency lending platforms. After all, we don’t know how serious the energy crisis in Europe will be, nor what could happen to the US economy.

As a cryptocurrency investor, instead of asking yourself if it’s a fund, you should ask yourself two questions:

1. Do you have money that you can afford to lose?

Before opening an account with one of the leading cryptocurrency exchanges like Bitcoin ProMorda, you should consider other financial goals such as: B. Retirement plans, setting up an emergency fund, and debt relief. Don’t prioritize investing in cryptocurrencies over building a financial foundation that will help you build long-term wealth.

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2. Do you believe in Bitcoin’s long-term potential?

When you invest long-term, you’re less likely to lose sleep due to short-term market swings, no matter how dramatic. Take a moment to understand why people think Bitcoin may outperform other assets and why others remain skeptical. So you can decide for yourself. If you are optimistic about Bitcoin’s potential over the next five, ten or even twenty years, now may be the time to invest. Prices are subject to change but remain low compared to last year.

Finish

It’s easy to get carried away by an 18% monthly price increase, but the broader macro factors that contributed to the cryptocurrency’s losses still play a role. If you decide to buy cryptocurrencies, you should consider ways to protect yourself from risk, such as making sure they are part of a diversified economy and using dollar moving averages to protect yourself from volatility.

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