Is Crypto Winter Really Over?

After Bitcoin price closed above $32k last week, the macro bullish outlook was confirmed amid heightened institutional demand.

The transition of the crypto winter to the spring season and a parabolic bull run are expected to take place in the coming months. As the trial for Sam Bankman-Fried (SBF), the former FTX boss, approaches the end, market experts believe a new era is brewing in the crypto industry amid heightened demand for digital assets by institutional investors. Moreover, the spot Bitcoin exchange-traded funds (ETF) frenzy has created a bullish narrative, especially after the United States Securities and Exchange Commission (SEC) opted not to appeal against the Grayscale Investments ruling.

Without a clear distinction between the crypto seasons, Morgan Stanley (NYSE: MS) recently wrote to investors that the upcoming Bitcoin halving and the imminent approval of spot Bitcoin ETF are a signal of the macro bull run ahead. As a result, Morgan Stanley argued that the crypto winter is over, as it tends to last 12 to 14 months after the prior bull rally peak.

“Signs indicate that “crypto winter” – bitcoin’s cyclical bear-market decline – may be in the past,” the investment bank wrote.

The approval of a spot Bitcoin ETF in the United States is expected to open floodgates of new cash flows to the crypto market in the subsequent months. With the US SEC having changed its stance on crypto dramatically and requested the fund managers to make changes to their spot Bitcoin ETF applications, experts believe it is only a matter of when and not if the first is approved.

Crypto Price Analysis and Market Outlook

According to a weekly report by CoinShares, the rising crypto optimism has prompted the largest inflows for the past one and a half years, at about $326 million. As expected, Bitcoin registered the largest inflows at about $296 million followed by Solana (SOL) at $24 million and Ethereum (ETH) at 6 million. The largest flows were from Canada, Germany, and Switzerland, with inflows of $134 million, $82 million and $50 million respectively.

The heightened cash inflow into crypto products comes amid a general price breakout in the past two weeks. According to the latest crypto market data provided through TradingView, Bitcoin price had gained about 27 percent in the past month to trade around $34.2k on Tuesday. The Uptober crypto narrative has also helped Bitcoin price to rally as more call options trades have been executed in the past few weeks.

From a technical standpoint, Bitcoin price has been on a rising trajectory YTD, characterized by higher highs and higher lows. Additionally, Bitcoin’s price on the daily time frame has formed a golden cross between the 50 and 200 Moving Averages (MA), with the weekly Relative Strength Index (RSI) pushing beyond 70.

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