Will this week’s crypto rally last for long?

Bitcoin has surged 5% and topped nearly $22,000 over the weekend, in what can be seen as a big jump from early June’s $17,500 low. Ethereum saw a big jump as well, rising to above $1,200. For investors. The big question in the crypto asset market now is whether the crypto market truly recovers or it is merely a false alarm.

Some experts pinpoint signs of what they call “a bull trap”. They advise investors to remain cautious, experts also warn the worst may eventually come true amid growing macroeconomic uncertainty, so, the price of bitcoin could drop even further because the crypto market is volatile and highly unpredictable, so buying cryptocurrencies at any price is risky.

While markets have seen bitcoin and Ethereum rally recently after creating lows around $17,500 and $880 respectively, several observers are unconvinced about calling a low in place yet. The general risk environment remains on a knife edge, and while traders think risk assets will rally significantly toward the end of the year, experts see risks skewed to one more selloff first.

It is easy for investors to hope the worst is in the past for the crypto market. Bitcoin’s price stayed above $20,000 and Ethereum held above $1,100 on Tuesday, a significant jump from their 15-month lows just two weeks ago.

But with the ongoing war in Ukraine, rising interest rates, unprecedented inflation, and talks of an imminent recession, the future of crypto assets is not certain and many would deservedly expect a severe cryptocurrency reverse back down.

Experts say there will likely be another crypto selloff during the upcoming weeks or months. Ethereum could fall as low as $750 and bitcoin could fall to $10,000 or $11,000, while $14,000 for bitcoin and $500 for Ethereum is also expected.

Whether bitcoin holds above $20,000 has little to do with crypto itself and more with the overall geopolitical and macroeconomic situation, which many do not believe will improve significantly in the short term. The crypto market, which has been tracking with the stock markets lately, has been a victim of the broader market selloff of risky assets.

The war in Ukraine, supply chain gluts, and inflation are by far the biggest worries. So far, bitcoin has not exactly proved to be the inflation-proof safe haven.

If traders have assessed their tolerance and can accept the risk, experts say now could be a good time to get in the crypto market since prices are lower than they’ve been in years. There is no such thing as a perfect time to enter the market, so, every trader should keep in mind that price fluctuations are part of the game and they should also be prepared for crypto prices to fall further.

Financial advisors recommend investing no more than 5% of one’s portfolio in crypto, and sticking to the two most well-established cryptocurrencies: bitcoin and Ethereum. Bitcoin and Ethereum are widely considered to be better investments thanks to their longer track records and long-term value growth, among other key factors.