Cryptocurrencies kicked off the new year with an impressive month-long rally. Bitcoin briefly topped $21,600 on Wednesday morning before returning to levels before the FTX exchange collapsed in November. Also, as of Wednesday he was up for 14 straight days, the longest streak since 2017. However, some analysts warn that Bitcoin’s price could halve before retesting his highs in late 2023.
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Recent BTC Boom
According to Joel Kruger, market strategist at LMAX Group, global macro fundamentals such as the Federal Reserve pivot, the resumption of economic activity in China, and the improving outlook for the Eurozone economy are all poised for Bitcoin in early 2023. The London-based financial services provider specializes in the forex market and cryptocurrencies.
“When it comes to cryptocurrencies, we believe long-term players are looking to build exposure at discounted and perceived prices,” Krueger said. “These players are betting that most of the downside from crypto implosion in 2022 is now fully priced in.”
Last year saw a wave of crypto company bankruptcies as prices plummeted from all-time highs in late 2021. The spring collapse of Terra Labs’ LUNA token and its sister stablecoin, TerraUSD, was the first cryptocurrency domino to wipe out his $60 billion in the market. worth. This led to the bankruptcy of cryptocurrency companies such as Three Arrows Capital, Voyager Digital and Celsius Network.
The FTX Group was the last big implosion to close out the year. FTX, the second-largest exchange by trading volume, has filed for bankruptcy after over-leveraging and mishandling billions of dollars in customer funds with sister company Alameda Research. Another of his, BlockFi, filed for bankruptcy shortly after. Bitcoin and cryptocurrencies have traded near his two-year lows in the months following the meltdown.
A more sustainable recovery will require deeper institutional adoption and regulatory clarity, Kruger says. “We have made great strides in this direction, but we believe there is still room to fill this gap,” he said.
Bitcoin price outlook
However, Krueger warns that the world’s largest cryptocurrency is yet to be fully elucidated. It went too far and too fast,” he said. He believes additional rises should be limited for now to allow a period of consolidation and adjustment.
“Fundamentally, global markets still look very fragile, and the Fed’s guarantees of a turnaround are very likely overstated. ” he says. Also, speculation about the type and level of regulatory compliance can cause more short-term confusion.
“We still don’t rule out a significant drop towards $10,000 in the first half of this year,” Kruger said. However, further Bitcoin pullbacks below the $10,000 level “should be limited” ahead of the next big topside run.
This could lead to a strong recovery for bitcoin in the second half of the year, where it rebounds above $50,000 and is “positioned to retest and break record highs,” he said. .
After rising to $21,600 on Wednesday morning, Bitcoin’s price fell about 3% to near $20,800 by Thursday morning. BTC has gained about 24% over the past month.
crypto stock action
Crypto stocks also surged in the recent rally.Listed exchange coin base (COIN) fell about 3% before the market on Thursday. COIN’s stock price jumped 45% last month. Still, the stock is down 21% over the past three months and 77% over the past year.bitcoin miner stocks marathon digital (MARA) fell more than 4.5% Thursday morning after surging 88% last month. However, MARA’s stock has fallen 36% over the past three months and 72% over the past year. Similarly, clean spark (CLSK) is up 24% month-on-month, but is down 12% over the past three months and is down 64% over the past year. CLSK shares fell 3% in the early hours of Thursday.
Follow Harrison Miller on Twitter for stock news and updates. @IBD_Harrison
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