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Bitcointhe leading cryptocurrency by market capitalization, it has lost more than any other cryptocurrency in 2022. Most of its decline can be attributed to the crypto winter, which kicked off in late 2021 and has prevented the cryptocurrency market from going any higher.
The Luna crash and FTX disaster further pushed the coin below the $20,000 mark, causing huge losses for Bitcoin investors.
However, things seem to be changing now (for the better), as Bitcoin has gained almost 22% in the past week. Bitcoin’s recent rally has helped it cross the $20,000 mark almost after four months. Currently trading at $21,274, the coin has gained almost $4000 in the last week and is testing the $22,000 resistance level. Bitcoin has made its highest price jump since the FTX crash.
Investors believe that 2023 will be the end of the crypto winter. Bitcoin’s move past the $22,000 resistance level would further strengthen his belief and increase his investment activities in the crypto space.
A good week for the crypto market
This past week has been an incredible week for the entire cryptocurrency market, with many of its top coins seeing double-digit growth. Ethereal it has risen 13.89% in the last week. The coin is currently trading at $1514.33 (its highest jump since the FTX crash). A major reason behind this market-wide growth could be the recent decline in the US Consumer Protection Index (CPI) for the month of December.
CPI decrease
One of the main reasons behind the cryptocurrency market crash in the last year was the aggressive stance of the FOMC to increase the interest rates charged by the Federal Reserve. The interest rate has increased from 0.25% in 2021 to 4.25-4.5% at the end of 2022.
The sporadic increase in interest rates (intended to address rising inflation in the US) had a major impact on the previously growing crypto market. Rising interest rates lead to a decrease in the money supply in the market, which makes investors more cautious with their investments and avoid investing in “risky” assets (such as Bitcoin).
The CPI (Consumer Price Index) report for December shows a decrease in inflation from 7.1% in November to 6.5% in December. The fall in the CPI has led the FOMC (Federal Open Market Committee) to raise interest rates by 50 bp. Despite an increase in the interest rate, the step is a relief, since it increased by 75 bp in the last four sessions.
The drop in the CPI, together with the possible tendency to relax interest rates, has caused investors to bet on riskier investments.
It is believed that the Fed would subsequently lower its interest rates in the near future as inflation stabilizes. Lower interest rates would once again make cryptocurrencies an attractive investment option for investors. Therefore, the crypto market could expect even more growth in the coming months.
Possible bull trap
Bitcoin’s fairy tale run over the past week has made many investors skeptical. They believe that the short-term growth of the currency might not last long. A bull trap refers to a situation where the price of an asset rises for a while and then falls (sometimes even crossing the support level).
In a volatile market, investors, after witnessing a surge in the value of their investments, might sell the security for a profit or cut their losses. This, when done on a large scale, leads to a further decline in the value of the asset. An investor could end up facing heavy losses if they invest during a bull trap.
A common indicator of a possible bull trap could be an increase in price coupled with a decrease in trading volume. The 4% decline in Bitcoin transaction volume is the main reason behind the fears of many experts.
However, this is not always the case, as an asset can rise even after showing signs of a bull trap if it manages to attract long-term investors.
other concerns
The FTX crash in November brought a huge setback for the cryptocurrency industry. Bitcoin, being the industry leader, bore the brunt of the crash. Although FTX did not hold Bitcoin as a reserve, many large institutions with shares in FTX may have to liquidate their Bitcoin holdings in the near future. A large-scale institutional sell-off could put an end to Bitcoin’s recent positive streak. It could also cause the currency to move beyond its support level.
BTC Alternatives
Major cryptocurrencies (such as Bitcoin and Ethereum) have underperformed in 2022, causing investors to lose billions of dollars. Investors’ past experiences with such assets have made them skeptical of investing in them.
On the other hand, the new age utility tokens have seen a huge influx of investment. These utility tokens are backed by innovative projects that the investor could use (unlike traditional cryptocurrencies). Some of these promising new age cryptocurrencies are listed below.
MEGA
He Meta Masters Guild It claims to be the largest Web 3 based mobile gaming guild. The creators of Meta Master’s Guild sought to prioritize the gaming aspect of the platform above all else. They are of the opinion that if the games are not interactive, the players will not play again. In addition to an amazing gaming experience, players get rewards in the form of “gems”, which they can then exchange for MEMAG.
Meta Master’s Guild is currently in stage 2 of its pre-sale. As of now, the “Play-and-Earn” gaming platform has managed to raise over $550,000 and is halfway through its pre-sale. MEMAG is currently available to investors at $0.01 (which could go up soon, seeing how it performs on presale). Investors can buy MEMAG through Ethereum or USDT.
FGHT
To struggle it is an innovative step towards promoting a healthy lifestyle among people. Being inherently a Move-to-Earn platform, FightOut requires its users to provide details like their body type, goals, etc. and then prepares for them a set of custom tasks for them to complete. FightOut tasks are performed by professional trainers and can replace a traditional gym. By completing tasks, users receive REPS (FightOut’s internal currency). Users can use these tokens to purchase products from the FightOut Store.
FightOut’s innovative vision for health and wellness is being rewarded by investors (as can be seen from its pre-sale). FightOut has managed to raise over $3 million dollars in a short period of time. The FGHT token is currently available to investors at 0.016 USDT. The coin will make its debut on CEX on April 5.
ESTUARY
skulls, a P2E platform, is currently in stage 5 of its pre-sale. Calvaria: Duels of eternity is a card game with free play and a version to earn money. Users are supposed to purchase a deck of cards before starting the Play-to-Earn version of the game. Users receive RIA tokens for winning games and for other achievements. These tokens could be used to buy other cards or they could be withdrawn. The card game. Being decentralized, it allows its users to use these cards on other decentralized platforms.
Having raised $2.8 million, Calvaria’s pre-sale is almost over. Investors can buy RIAs through Ethereum or USDT.
Conclution
Political decisions and general market conditions play a very important role in the movement of a cryptocurrency. A further decline in inflation could lead to an even steeper run for the crypto market. Although a bull trap could result in short-term losses, favorable policy decisions could help investors easily cut those losses and reap big long-term gains. Investors can also invest in the pre-sale of the new generation utility tokens (discussed above), as they show great potential.
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