How long will the growth of cryptocurrencies last after the holidays?

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Specialists of the ASTL investment project assessed the prerequisites for the continued growth of the rates of bitcoin and other tokens and tried to predict the further movement of the market.

At the end of the New Year holidays, Bitcoin rose in price to a three-month high, exceeding $17.2 thousand at the moment. At the same time, several cryptocurrencies from the top twenty in terms of market capitalization showed an increase of about 20% or more. Over the past week, there has also been an increase in several groups of cryptocurrencies united by a common “narrative”, as exemplified by staking pool tokens or blockchain project tokens related to developments in the field of artificial intelligence. Single large price jumps also took place in less capitalized coins, among which, for example, Gala (GALA) or Zilliqa (ZIL). As for the altcoins, which showed decent growth, it was mainly the growth provoked by the news background from the projects themselves. For example, burning coins from profits and the like. Coins often react to such news. But there were also cases of a sharp increase in the price of cryptocurrency, absolutely not confirmed by anything, that is, ordinary market manipulations.

Several factors played in favor of Bitcoin itself. First, we are seeing the traditional Christmas rally, the growth of the crypto market during the Christmas holidays, which this year has shifted to the period after the new year due to the effects of the FTX crash and the overall difficult macroeconomic situation. Cryptocurrencies traditionally grow at Christmas, because on these holidays people give gifts (often cash), invest in some risky but attractive projects. This is such a tradition in the USA, someone will buy a new iPhone as a gift for their loved one, and someone will buy bitcoins. However, Bitcoin, in fact, continues to be in a flat, and the range of the corridor is quite narrow (approximately for the next two weeks, up to $21,000). Reviewing expectations for 2023, we can say that during the year, Bitcoin will give hope to the bulls, but in the end, the growth will not be confirmed, and the price of BTC will bog down. The real activity will start closer to the halving.

Secondly, the US Department of Labor published data on a sharp increase in the number of jobs in the US in December. This means a reduction in the unemployment rate in the country, to 3.5%. Together with the slowdown in wage growth, the decline in unemployment allegedly indicates a gradual recovery of the economy from the crisis (although, in fact, this does not mean anything). This allegedly means that the Fed at the next meeting may not tighten its credit policy and not raise the key rate, or raise it not as radically as last year (I remind you that it happened there by 75 pp at a time). Against this background, the S&P 500 and Nasdaq indices rose, and the crypto market with the US stock market is still highly correlated.

Third, at the end of December, Fidelity Investments, a $4.2 trillion asset manager, filed trademark applications related to the metaverse, NFTs, digital real estate, and crypto trading. This also became a signal that large institutions, despite the crypto winter, still see the potential for growth in cryptocurrencies and are developing in this direction.

Unfortunately, the current growth will be short-lived and it is not worth waiting for the continuation of the bullish cycle and the end of the crypto winter. American financial regulators will once again begin to publish statistics reflecting the situation in the economy. And it remains difficult, although it is in a better condition than a year ago. Once again, talk about the regulation of stablecoins will resume, and they are the main tool for the liquidity of the crypto market. We all have to prepare for a very painful volatility that will be observed in the crypto market throughout the first half of 2023.

Most likely, in the near future there will be a correction of bitcoin, which in a week or two will again go down and reach $15-16 thousand. There are still no fundamental factors for the growth of digital coins. Investors of any level are better off considering not only current risks, but also the prospects for a global recession. In order not to lose a lot, it is better to wait out difficult times in protective assets (for example, in ASTL tokens), or reduce investments in the most unstable digital coins.

In the current difficult conditions, investors need to be able to directly and prospectively invest fiat and cryptocurrency assets in projects that provide a stable income that obviously exceeds inflationary expectations and is not subject to any sanctions, blocking and confiscation. The ASTL project is a simple and elegant solution for potential investors – an investment in the development of the real sector of a diversified portfolio of cryptocurrencies, with a fairly high ROI (up to 12% annually) with payments in stablecoin (USDT).

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