2022 has seen several significant incidents in the Crypto industry, where the downfall of the FTX exchange shook the whole industry and is still making headlines. But, 2023 started on a positive note where we can observe the recovery of the Crypto industry.

The Crypto value has been on a 15-day daily increment. This happened with Bitcoin’s price in November 2013. Recently, Bitcoin has shown a bullish trend, meaning the Crypto market is bound to see a positive change, and we can peacefully forget what happened in 2022.

Observing the current Crypto market trend, we can expect the Crypto bull run to be on its way. In this blog, let’s check what factors contribute to a bull run and the key reasons that’ll be responsible for it.

May it be the bull run or the Crypto winter, the prices of Crypto determine everything. So in the following section, let’s first discuss the factors that determine the price of the Cryptos.

Factors that determine Crypto prices

• Demand

Perhaps investor demand is the primary factor driving up values in the whole Crypto market. More coins or tokens will probably be issued, but not all of them will likely be in demand as the Crypto market grows. Their valuations will, therefore, probably remain low.

• Expected Growth

The expected growth in the value or market capitalization of the Crypto industry can increase demand. Investors may be motivated to purchase Cryptos in anticipation of market growth if they expect the industry to expand, thinking they are “getting in early” on an investment. In turn, this raises demand.

• Public Sentiment

Sentiment plays a significant role in the markets. People may be less eager to spend or invest money if they have pessimistic views on the future. On the other hand, if they have a positive outlook, they might want to invest or make plans for the future.

For instance, if they believe the Crypto industry will expand, as previously said, they have an optimistic outlook on the market and increased demand for tokens, which will raise prices.

• Returns From Conventional Investments

How well traditional markets are performing is the last element that might have an impact on how well the Crypto market performs. Investors may be searching for alternatives to the stock market if they aren’t getting the profits they want from it. The rise and strong returns in the Crypto industry have made them obvious candidates in the past few years. The demand for Cryptos will increase as more investors enter the market, leading to greater valuations.

As we’ve seen, the Crypto market is unpredictable and presents significant risks to investors looking for quick gains.

After learning about the factors that determine Crypto prices, let’s know the factors contributing to a Crypto bull run.

Key factors that contribute to a Crypto bull run

A number of factors primarily drive the Crypto bull market. These include:

• Demand and supply: The demand for Crypto assets can be affected by the traders’ and investors’ interests, which can boost or lower prices.

• Market news sentiment: The price of the asset will typically rise as a result of partnerships, upbeat announcements, fresh initiatives, or technological advancements that attract investors.

• Institutional adoption: This shows the utility of Cryptos, which may cause a ripple effect on retail users to adopt them.

• Economic and political factors: Political stability and economic growth promote the use of Cryptos and broaden financial inclusion.

• Scarcity of alternative investment: Uncertainty reduces demand for slow-moving or low-return assets, which causes a rise in demand for higher-volatility, high-return assets like Crypto. The price of Crypto will inevitably rise as demand rises.

• Inflation and interest rate: An investor with extra cash may find it simpler to invest in speculative and riskier assets like Crypto with high liquidity when interest rates are higher.

Despite the fact that these elements support the bull run in the Crypto market, it is difficult to tell when it will start because the sector is still relatively young and very volatile.

Now, let’s check the reason that can make the bull run happen soon.

Possible reasons that can make the bull run happen soon

#1 The Crypto market’s performance at the end of 2022 indicated that this year could be prosperous.

The current performance of the Crypto market can accurately predict future outcomes. We had a bullish year, followed by a correction year, and a fantastic year because the entire market moves in lockstep with Bitcoin’s four-year cycle. It implies that 2023 will be amazing, followed by one that will be even better.

#2 This year should see the end of the bear market.

Since the price of Cryptos fell and reached a bottom before the end of 2022, experts anticipated that the bear market would end this year. Based on the Crypto market’s past performances, we assume that the bear market will finish within the next three months.

#3 A bull market occurs once when the Crypto market reaches its bottom.

To mount higher than you were before, you occasionally have to touch rock bottom. It also occurs in the Crypto market; thus, if the market has been experiencing a bear market, a run market immediately follows. Although we should be cautious, individuals investing in reliable Crypto options today can benefit in the coming future.

#4 Bitcoin always returns.

Since Bitcoin remains one of the most widely used Cryptos, its performance has an impact on the entire Crypto market. The four-year cycle is always taken into account by analysts when analyzing the fundamental swings of Bitcoin. It will rebound this time as it has always followed ups and downs. In case you need proof, the price of Bitcoin rose by 2% at the beginning of the year.

#5 Web3 is going to be the future of the internet and Cryptos

Economic considerations drive the previous four explanations for the bullish Crypto market. But the fifth one is novel and will trigger a significant bull run earlier than even the experts anticipated. This is because users may trade considerably more rapidly and without the need for intermediaries like banks or governments, thanks to Web3 and the decentralization of the Crypto market.

Bottom line

For Cryptos, 2022 has been an eventful year, but not in the way that most investors would have preferred. The value of the Crypto market has declined significantly, but that doesn’t rule out the possibility of a bull run in the near future, especially when you take into account the ups and downs of Crypto values generally during the past few years. So let’s hold onto optimism for the upcoming bull run.

Disclaimer: Cryptocurrency is not a legal tender and is currently unregulated. Kindly ensure that you undertake sufficient risk assessment when trading cryptocurrencies as they are often subject to high price volatility. The information provided in this section doesn't represent any investment advice or WazirX's official position. WazirX reserves the right in its sole discretion to amend or change this blog post at any time and for any reasons without prior notice.