logologologologo
  • Home
  • Business
  • Markets
  • Exchange
  • Investment
  • Personal Finance

Bitcoin gains, but crypto braced for more selling with ‘no time for optimism’

The new year has not been kind to cryptocurrencies, which rose on Wednesday despite about a week of selling that briefly drove Bitcoin below $40,000.

A jittery market has begun 2022 on a sour note, with a suddenly hawkish Federal Reserve and the Omicron wave of COVID-19 infections making investors risk-averse. Meanwhile, Bitcoin set a new low at $39,893.62 — having swooned by more than 40% since its November peak.

Bitcoin has shed over 8% at its weakest levels this week, while smaller tokens like Ethereum, Solana, Avalanche and Terra have fallen even harder. All have clawed back within the last day.

Despite Wednesday’s rebound, it’s far too early to call a trend reversal in the sell-off given trading volume on major crypto exchanges, Yuya Hasegawa, an analyst with Tokyo-based crypto exchange Bitbank, told this week.

After clearing the hurdle of Fed Chair Jerome Powell’s confirmation hearing for a second term, investors are nervously anticipating inflation data that will shape sentiment in the near term, with crypto continuing to trade almost lock-step with technology stocks.

Bitcoin’s price range for the rest of the week should range between $40,000 and $48,000, Hasegawa said — but admitted that “it certainly is not a time for optimism in the short run”.

The start of a rate hike campaign, which threatens to withdraw the liquidity and tame the inflation that have been bullish for crypto, is curdling sentiment. According to the Chicago Mercantile Exchange (CME) data, 71% of market participants expect the Fed to raise interest rates by 25 to 50 basis points in March.

‘Hard comfort” in crypto fundamentals

As bad as the current selloff is, Matt Hougan, CIO of crypto-asset manager Bitwise, still believes the current bear market won’t last as long as previous downturns, based on strong user fundamentals digital coins have developed over the past year.

Outside of speculative activity, Hougan told that crypto adoption has never been higher. There’s been a gold rush among both small and large digital coin investors: in particular, venture capital helped fuel a $33 billion boom in crypto startups last year.

That funding also explains why developer activity in the sector stands at its peak, according to a report last week from Electric Capital. The space attracts more developers when crypto prices rally. Yet according to the report, the number of active developers stays flat historically when prices fall.

And the native tokens of Ethereum (ETH-USD), Polkadot (DOT1-USD), Solana (SOL1-USD) and Bitcoin make up the largest crypto developer ecosystems, with 65% of active developers having joined in 2021.

But a Bitwise survey conducted in December found that the percentage of financial advisors allocating accounts to crypto “is up more than 50% and is expected to continue to grow at that pace or faster over the next year,” according to Hougan.

That might be “hard comfort” for investors staring down tighter Fed policy in the near-term, but could be a silver lining later on, he added. “It doesn’t mean there isn’t more potential downside right now, but it does mean this isn’t like past bear markets,” the investor said.

Where will cryptocurrencies settle before upward momentum returns?

Hougan said higher growth layer-1 smart contract tokens like Ether, Solana, Avalanche (AVAX-USD) and Terra (LUNA-USD) will “act like canaries in the coal mine as to whether and when the downtrend has been exhausted.”

Related posts

February 3, 2023

Where Will AMD Stock Be In 1 Year?


Read more

Categories

  • Business
  • Content
  • Exchange
  • Inflation
  • Investment
  • Markets
  • Personal Finance
  • Technology
  • Uncategorized

Archives

  • February 2023
  • January 2023
  • December 2022
  • November 2022
  • October 2022
  • September 2022
  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021

Recent Posts

  • Where Will AMD Stock Be In 1 Year?
  • Here’s how — and where — Netflix has started cracking down on password sharing
  • 2 reasons Meta stock is exploding 20% after a whopper earnings miss
  • Apple earnings: What to expect from the iPhone maker
  • Bitcoin closes out best January since 2013

About Us

The Alpha Cut a Vida Street LLC Company
1404 N. Ronald Reagan Blvd.
Suite 1120
Longwood, FL 32750

Link

(843) 256-4375
https://thealphacut.com

Why Us

Terms & Privacy
Policy & Procedure
Disclaimer

This material is not an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed, and is to be used for informational purposes only.
Any performance results discussed herein represent past performance, not a guarantee of future performance, and are not indicative of any specific investment. Due to the timing of information presented, investment performance may be adjusted after the publication of this report. There can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this communication will be profitable, equal any corresponding indicated historical performance levels or be suitable for your portfolio.
All data in this communication is provided for informational purposes only and is not intended for trading or investing purposes. We expressly disclaim the accuracy, adequacy, or completeness of any data and content provided by financial exchanges, individual issuers, their respective affiliates and business partners and shall not be liable for any errors, omissions or other defects in, delays or interruptions in such data, or for any actions taken in reliance thereon. You agree not to copy, modify, reformat, download, store, reproduce, reprocess, transmit or redistribute any data or information found herein or use any such data or information in a commercial enterprise without obtaining our prior written consent.
We make no express or implied warranties or representations and shall have no liability whatsoever with respect to any data contained herein. The data may not be further redistributed or used to create indices or other financial products. This report and the views expressed herein are subject to change at any time based upon market or other conditions (such as domestic and global economic trends) and are current as of the date of publication hereof. The information, analysis, and opinions expressed herein are for general information only and are not intended to provide specific advice or recommendations for any individual or entity.
We emphasize that Investment in the securities of smaller companies can involve greater risk than is generally associated with investment in larger, more established companies, and can result in significant capital losses that may have a detrimental effect on the value of your investments.
Forecasting represents predictions of market prices and/or volume patterns utilizing varying analytical data. It is not representative of a projection of the stock market, or of any specific investment.
Nothing contained in this material is intended to constitute legal, tax, securities or investment advice, nor an opinion regarding the appropriateness of any investment. The general information contained in this publication should not be acted upon without obtaining specific legal, tax and investment advice from a licensed professional.
Please remember that all investments carry some level of risk, including the potential loss of principal invested. They do not typically grow at an even rate of return and may experience negative growth.As with any structuring of a portfolio of investments, attempting to reduce risk and increase return could, at certain times, unintentionally reduce returns.
The information, analysis and opinions expressed herein are for general, impersonal information only and are not intended to provide specific advice or recommendations for any individual entity.

copyright © Alpha Cut 2021. All Right Reserved
The Alpha Cut a Vida Street LLC Company