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Things are on the up for cryptocurrencies, at least for the time being.

Bitcoin, the largest crypto, reached $24,000 on Friday hitting a fresh new high in July as it continues to follow the rising stock market. Ethereum, the second-largest crypto, climbed above $1,700 and other cryptocurrencies were also trading higher on Friday.

The two largest cryptocurrencies are on track for their best month of the year. Bitcoin is up more than 20% in July and ethereum is up 50%, according to NextAdvisors crypto price data.

But after a dismal first half of the year, is the crypto market poised for a bull run in the second half? Experts say not quite, warning investors to remain cautious. The market could easily come crashing down again given the current macro environment, so it may not be wise take on risky bets right now.

Many are warning we are not yet out of the woods from a macro perspective, says Adrian Kenny, a senior sales trader at digital asset broker GlobalBlock. A cautious thesis is a more logical stance to take in the current conditions.

A lot happened this week that led to a rally in the crypto and wider markets in general.

Many big retail and tech companies including Google, Apple, and Meta revealed their second-quarter earnings, a factor that influences stock prices. The Federal Reserve raised interest rates by 75 basis points, but signaled it may slow down the pace of such rises. And an economic report revealed that U.S. GDP fell for a second consecutive quarter in a row. Though that follows a commonly understood technical definition of a recession, President Joe Biden and Fed Chairman Jerome Powell both said this week that the U.S. is not in a recession.

Experts say all eyes have recently been looking to how the Fed would respond to the threat of soaring inflation and a potential recession. Experts say the upward movement in the markets suggest that investors were already expecting those outcomes this week, and will likely continue moving higher in the short-term because investors have already priced in the bad news.

The reaction has been very positive this week and the cryptocurrency markets once again tipped over the $1 trillion market cap once again, Kenny says.

While this week has for the first time in over a month seen some market recovery, there is still an undoubtedly considerable mountain to climb in terms of normality or the hopes of a return to the highs of 2021 anytime soon, says Kenny.

If youre investing crypto for the long-term, the recent developments this week shouldnt drastically alter your investment strategy. Its simply a reminder that crypto assets are highly volatility and risky, particularly during times of economic uncertainty.

While there has been positive momentum in the crypto market this week, bitcoin and ethereum are still down more than 50% from when they reached their all-time highs last November. Given cryptos history of volatility, prices will continue to drastically swing up and down and its extremely difficult to predict with certainty where theyll go next.

One thing is certain: theres a gloomy list of long-term potential worries for the U.S. economy, so experts recommend playing it safe. Allocate no more than 5% of crypto to your investment portfolio and only put in what youre OK with losing. Before putting any extra cash into the crypto market, always make sure your financial bases are covered from your retirement accounts to emergency savings.

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Bitcoin and Ethereum Prices Are As High As Theyve Been Since June Crypto Crash, But Experts Still Urge Caution for Investors - NextAdvisor