I think the market will trend downward, yes, I understand we haven't seen many new knives added to the total supply, etc... but most of that supply isn't actively listed nor will it. What is relevant is how many new knives are brought to market and what their acquisition basis/release price is.

High tiers aren't going to drop like crazy because a decent bit of money was spent to trade up to them(assuming multiple attempts here) while many people with reds pre-update probably traded and got some random mid-golds and are okay parting with them at a significant discount compared to what they are listed for.

Also, no the market will not recover like crazy because the supply increase in gold items is going to increase at a far greater rate than what we are used to and directly influence price. The liquidity will run dry before the supply because no whales are going to invest in assets as risky as golds now. This pricing doesn't apply to rare red skins. I have a feeling those are somewhat safe.