Both 2021 and 2022 represented a major drop in the cryptocurrency market. Different reasons add up to the price drop, including bans by certain countries and the increase of interest rates by the US Federal Reserve.
Cryptos are characterized by being highly volatile and very susceptible to market changes, which is why we saw drops in the prices of stablecoins in 2022. A predominant example is bitcoin, which had a price of 65,000 USD at the end of 2021 but whose value today is around 23,000 USD.
While these price drops were alarming, causing many investors to lose confidence in this asset, many people are wondering if it’s time to make bigger investments or if shorting crypto could generate big profits in this unstable market? Read on and find out what changes 2023 could bring.
Opportunities Amid Crisis
The crypto market is in a dubious situation not only due to the low price of stablecoins but also because of the loss of investor confidence. This kind of distrust has prevented not only old investors from returning, but new ones from feeling doubtful about the ability to earn a return by putting their money into cryptos.
However, 2023 brings with it a global economic recovery from the events that occurred in 2022, and this has seen a rise in the cryptocurrency market. Currently, bitcoin has a stable price of 23,541 USD and has an upward trend that many people believe will increase.
This type of increase is common within the financial markets after price drops and represents a moment when prices stabilize again. For a smart investor, this becomes a key moment, since most forecasts point to a favorable increase.
Market Predictions for 2023
Currently, the cryptocurrency market is led by Bitcoin and its price is the one that sets the pace of recovery within the different cryptocurrencies. For this reason, most investors are looking at the predictions around it to determine when it is safe to make a move.
The forecasts are hard to read and have multiple varied opinions: Portals such as Forbes indicate drops in the cryptocurrency market that can bring Bitcoin down about 5,000 USD due to possible interest rate hikes. But other specialized exchange sites such as Changelly mark upward trends up to a price of 38,782 USD by the end of the year.
However, the point that determines whether prices could go down or up is being defined at the beginning of the year as breaking the so-called "resistance barrier". Bitcoin has reached a peak price of 25,000 USD several times this year, only to fall back to about 23,000 USD, demonstrating that the downtrend is still present and a boost is needed to increase confidence in the market.
Popular analysts such as Rekt Capital and CryptoTommey suggest taking a passive state as the market rises above 25,000 USD, as this is the time when the downtrend will fall and more investors become attracted. Once this breakout is defined, it will be possible to have greater security around the forecasted rises for the end of the year.
Opinions seem to be mixed in the cryptoassets area and the market seems to be at a standstill while investors define whether the trend will be positive or negative. Even the big investors called "Whales" have not made strong moves, allowing the market to recover only by the decision of smaller investors.
The biggest hurdle in the crypto market is whether it will be able to break through the 25,000 USD resistance. Given the recent rallies, it seems that it is possible. Bitcoin has risen more than 6,000 USD in just 3 months, so investing seems to be the most suitable option for the moment.
However, it is necessary to be aware of major movements around the global economy. More country bans or interest rate hikes at the Federal Reserve will indicate that it is necessary to take quick selling actions to avoid big losses.