As 2023 begins, many speculations of a bull run in the crypto market are coming up based on the current trends and patterns. Although 2022 closed off with low prices, January is expected to momentum up. This article analyzes the factors that will determine prices and the movements of major cryptocurrencies for the year.
Factors affecting crypto prices
When it comes to the beginning of the year, the recession is most likely to affect crypto prices. The first of January has begun with small green signals in Bitcoin and Ether charts but this doesn’t mean that recession has died down.
According to the IMF head, “one-third of the world” will be hit by the global financial crisis this year. Half of the EU, China, and the US are expected to suffer from a recession, which will directly push the crypto prices to lower lows.
Another factor that will affect prices is the mass adoption of Decentralized finance and applications in 2023. A lot of experts believe that DeFi is the next trend in the Web3 industry as people will begin to adopt decentralized exchanges and platforms more than centralized ones.
The regulators are also keeping an eye on cryptocurrency, so the community should expect stricter rules and regulations along with taxing this year. Ever since FTX’s collapse, the authorities have realized the importance of policing Web3 to maintain the traditional financial system. So, the community will see massive changes in the industry as well.
In 2022, BTC prices dropped below $20k from $31k. In 2023, there’s a high chance that Bitcoin might outperform or underperform based on current trends.
According to Tim Draper, the token will hit $250,000 by the end of this year while Carol Alexander, a professor of finance, says it will drop below $10,000.
Bitcoin halving, which is expected to take place in May 2024 is a highly anticipated event for holders because there’s definitely going to be a positive climb in favor of a bull run, before that everyone has mixed feelings about the prices.
Last year, ETH went through a major transition from proof-of-work to proof-of-stake, which many expected would improve its prices but there was no significant rise and the bearish pattern remained until December 2022.
Ethereum price analysis shows a bullish breakout based on January’s movements but it could also be short-term considering the underlying factors. According to analysts, the prices will most likely pick up from March 2023.
The RSI, at the time of writing, is at 48.52 which is below the overbought limit of 70, meaning there’s buying activity, indicating a bullish pattern in the market.
Overall, the crypto community and Bitcoin enthusiasts are bullish about the prices picking up this year. Many believe that a year-old bear market is most likely to indicate that a bull run is coming.
Although many risk factors exist that might indicate the prices going downhill again, as long as the industry keeps building and developing, the market will rise as well. Many platforms have already begun educational campaigns to show people how Web3, cryptocurrency, and blockchain technology could revolutionize everyday exchanges.