The macroeconomic headwinds and tightening of the monetary policy by the US Federal Reserve are likely to limit the upside for cryptocurrencies in the next six months, but it will not result in a “crypto winter” in the digital asset industry, the Bank of America said in a note.

Crypto winter is a term used to refer to a prolonged period where prices of digital assets keep declining without any recovery in sight. In the last three months, the term has been making the rounds in the industry over the market downturn of $1.2 trillion. A similar market doldrum was witnessed between 2017 and 2018 when Bitcoin’s price plunged over 80 percent to as low as $3,100 and caused a majority of altcoins to plummet.

The recent slide has spooked investors who believe that a repeat is playing out now following the Russian invasion of Ukraine, which resulted in a major selloff in cryptocurrencies.

Analysts at the Bank of America noted that there was a “lack of directional conviction” in cryptocurrency flows between personal and exchange-based wallets.

However, given the current level of user adoption and growth in development activity, there will not be a crypto winter, Alkesh Shah, the bank’s lead digital asset strategist, said.

“Bitcoin exchange outflows suggest that buying on dips is muted, while exchange inflows for ether show the potential for continued price headwinds,” CoinDesk reported quoting the BoA note titled “Digital Assets: In the Flow”.

Exchange inflows of the top three stablecoins had slowed significantly for the second consecutive week, the report said. Exchange inflows were down 99 percent week-on-week at $517,000 last week. Investors may be biding their time given the current macroeconomic environment, the note said.

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Cryptocurrencies will be able to break out of the recent trading range only when concerns of a potential recession ease, the bank analysts said.

In early February, Shah had told Fortune that cryptos would continue to see price declines for the next three to six months. Once risk assets, including cryptos, adjust to the expected reality of rate hikes by the Fed, prices will again start to rise, Shah had said.

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(Edited by : Thomas Abraham)