The bullish breakout in crypto that began last week has investors beaming with hope for a sustainable recovery. Bitcoin (BTC) and other cryptocurrencies have struggled throughout 2022 amid internal and external uncertain events.
The crypto market’s initial pullback between November 2021 and April 2022 did not worry investors much, as it was seen as a natural pullback from all-time highs. However, the May crash of TerraUSD (UST), a once-thriving algorithmic stablecoin from the Terra Luna (LUNA) ecosystem, changed the course of the market from a pullback to a full-fledged bear run.
Several companies exposed to UST failed to survive the crash, including Three Arrows Capital, Celsius Network and Voyager. Many people have lost their life savings and set crypto back years.
Fast forward to November 2022, yet another crypto giant filed for bankruptcy amid a catastrophic collapse. Sam Bankman-Fried’s FTX exchange faced a liquidity crisis following reports of an unhealthy financial relationship with its sister company Alameda Research.
Crypto got bloody again, with Bitcoin price falling to November 2020 levels at $15,466. Ethereum, the second largest crypto, fell to $1,100 below support and hit a four-month low of $1,075.
Crypto experts believe that 2023 is unlikely to be the year we see a massive bullish reversal, with some predicting that the crypto winter will last until December. However, there are some key factors behind the rise in crypto prices, especially among altcoins, since last week.
Easing inflation is driving investors back to crypto and riskier assets
Bitcoin price rose above $17,000 on Monday, hitting a three-week high in what market watchers believed was a reaction by investors to signs of easing inflation. Altcoins also saw significant gains, with Ethereum increasing by more than 4%.
The crypto market’s upward trend occurred just 24 hours after the Federal Reserve Bank of New York announced an expected inflation expectation of 5% for December, which was lower than the previously forecast 5.2%.
According to CoinDesk, the 5% reading marks a decline for the second month in a row, and the most recent reading is the lowest it has been since July 2021. The actions taken by the Federal Reserve to control inflation affect still the prices of both Bitcoin and Ether.
Investors are banking on the expectation of falling inflation as a sign of a sustainable market recovery, which explains a rise in long bets on both ETH and BTC. The Fed also expects interest rates to average around 5%.
Bitcoin Miners Break Multi-Month Selling Streak, As Crypto Prices Jump
Bitcoin miners were forced to continue divesting themselves of their Bitcoin holdings in 2022 as crypto prices broke out into the green. The collapse of FTX made matters worse for miners, forcing many to shut down their rigs due to ‘miner capitulation’.
William Clemente, the founder of Reflexivity, a crypto research platform, believes, “the heavy selling pressure from Bitcoin miners that has blocked the market for the past 4 months has finally subsided for the time being.”
On-chain data from Glassnode, one of the leading crypto analytics platforms, confirms insight into miner capitulation relief over a 30-day net position. Additionally, Bitcoin miner reserves hit a monthly high on January 8th.
Extreme Fear Drives Crypto Price Recovery
Veteran investors believe you should buy when everyone else is reeling under seemingly endless losses. However, this statement cannot be taken lightly considering the devastation investors have been assured of in 2022.
According to Alternative.me, a platform that presents the Crypto Fear & Greed Index, general market sentiment fell back to the top of the most bearish bracket last weekend. The index holds at 26, roughly where it has been for the past month.
Despite the bullish movement in crypto prices, altcoin volume remains relatively low based on chain data from Santiment. Therefore, for the market to keep the upward trend intact, it will need support from investors, especially the whales. Another report from CryptoQuant revealed that whale selling pressure eased in December, indicating a “positive effect on market sentiment” over the coming months.
Altcoins to Consider for Faster Returns
The rise in crypto prices points to a possible market turnaround in 2023, but that’s not guaranteed if 2022 is anything to go by. Therefore, investors should make deliberate decisions as they diversify their crypto portfolios.
New and emerging crypto projects can provide a faster escape from the bear market run. The assets listed here are in their pre-sales and are performing exceptionally well ahead of their first stock market listings.
Dash 2 Trade (D2T) is listed on Gate.io
Learn2Trade, a team of veteran trading experts, is delighted to introduce a revolutionary cryptocurrency platform poised to change the way people view and manage their crypto portfolios. Dash 2 Trade offers users unparalleled access to world-class crypto analytics and social trading tools.
The platform is packed with features and services for traders to explore as they navigate the ever-evolving cryptocurrency market. From timely trade signals to social sentiment and on-chain analysis, Dash 2 Trade makes it easy to spot trending coins and stay ahead of the curve.
But that’s not all – Dash 2 Trade also includes a trading strategy builder to help investors improve their skills and share ideas with others. Additionally, users can access a pre-sale dashboard to discover new projects entering the market before they launch. Get ready to take your crypto trading to the next level with Dash 2 Trade.
Dash 2 Trade pre-sale ends in less than 24 hours as it makes its first debut as a tradable asset on Gate.io. Both teams confirmed the listing, with Gate.io welcoming the new assets with an initial free offering and an airdrop worth $120,000.
It is a revolutionary cryptocurrency platform that is revolutionizing the way we think about fitness. FightOut combines the power of a fitness app and a chain of gyms to encourage users to live a healthy lifestyle.
In addition to earning rewards for completing workout tasks and challenges, users have the opportunity to thrive within a vibrant community. The platform operates within a tokenized economy, where users can earn FGHT tokens for completing M2E tasks.
FightOut takes things to the next level by introducing Web3 solutions, where users can create accounts and create their own digital NFT avatars to use in the metaverse.
Using blockchain technology, C+Charge has developed a robust Peer-to-Peer (P2P) payment system for electric vehicle (EV) charging stations. Users will get individual electronic wallets, which they can use to make payments for EV charging with the C+Charge utility token.
As the number of EVs on our roads increases, the need for more charging stations becomes apparent. In addition, the EV industry faces the challenge of creating standardization for charging.
Disclaimer for Uncirculars, with a Touch of Personality:
While we love diving into the exciting world of crypto here at Uncirculars, remember that this post, and all our content, is purely for your information and exploration. Think of it as your crypto compass, pointing you in the right direction to do your own research and make informed decisions.
No legal, tax, investment, or financial advice should be inferred from these pixels. We’re not fortune tellers or stockbrokers, just passionate crypto enthusiasts sharing our knowledge.
And just like that rollercoaster ride in your favorite DeFi protocol, past performance isn’t a guarantee of future thrills. The value of crypto assets can be as unpredictable as a moon landing, so buckle up and do your due diligence before taking the plunge.
Ultimately, any crypto adventure you embark on is yours alone. We’re just happy to be your crypto companion, cheering you on from the sidelines (and maybe sharing some snacks along the way). So research, explore, and remember, with a little knowledge and a lot of curiosity, you can navigate the crypto cosmos like a pro!
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