Although November saw many surprises within the crypto marketplace, with exchanges collapsing and taking coins along with them – things may soon be about to change. Why might December take on more bullish undertones and what factors are currently at play?
With many speculators predicting the bottom is close and that we’re very close to a large uptick, what does the next couple of months hold for the crypto space in general. We’re all overdue some positive news in what has been a negative time in the sector of late. If the bottom for this cycle is indeed close, a bullish turn is inevitable afterwards. From the US midterms to the shenanigans between FTX and Binance… it’s been a busy month. Let’s examine what Ron has to say.
Regulation and speculation
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It’s no secret that the United States political system is more polarized than it has been in decades. Although the 2024 elections are still somewhat far off, the results of the November midterms were of course a factor that affects the crypto market.
Let’s remember that Republicans have always embraced a “hands-off” stance in terms of cryptocurrency regulations. If the GOP had won a decisive victory, this would have potentially meant less scrutiny from the SEC. Also, a Republican-backed bill known as the Digital Trading Clarity Act of 2022 would likely be passed. This proposal provides crypto exchanges with a grace period before they are obliged to officially register as brokers.
The main takeaway point here is that less governmental oversight would likely lead to a more bullish (if only short-term) market outlook. However, on the flip side, many feel that more regulation could be a positive – as casual speculators would be more likely to put their funds into exchanges and would be less fearful of enormous volatility.
Keeping a Finger on the Institutional Pulse
Similar to other tradable assets, many look towards the larger institutional firms in order to glean a bit of insight into where the crypto markets may be headed. This is why a recent decision by Fidelity Digital Asset Management has been turning heads. It has been discovered that this corporate giant (boasting a staggering asset cap of $9.9 trillion) will soon hire 100 new employees; an increase of 20%.
This obviously hints that their analysts predict an uptick in the crypto markets at some point in the near future. Although we could argue that such a move is simply a means for companies with bigger balance sheets to take advantage of a bearish climate, this strategy still seems to bode well for December 2022, January 2023, and beyond. In other words, a more optimistic outlook by larger market makers should provide a bit more reassurance across the boards.
Bitcoin Might be Back in Town
Another point to highlight involves the price of Bitcoin. After sliding nearly 70% from its all-time high of $69,000 dollars in November 2021, a reversal may soon be in order. One look at recent data seems to point in this direction, as BTC values by nearly 16% since June, although have dropped again in the past two weeks. It’s a highly turbulent time in the market, and many feel like we’re approaching the bottom of this bear cycle.
Further good news is emerging on the more technical side of things. The RSI (Relative Strength Indicator) appears to have finally swung towards a more bullish stance; a trend not seen since those dark days in November 2021 when they predicted the 2022 downward slide. We should keep in mind that while the RSI has traditionally been used to determine long-term price trends, this could signal that BTC and altcoins as a whole are set to make gains in the coming few months.
ETH Movements and Merge Expectations
Many investors also consider ETH prices to represent a fairly good indicator of the crypto markets as a whole. In this case, traders have yet another reason to remain cautiously optimistic. Not only has ETH outperformed BTC in 2022, but its still unclear how well the merge will do to improve its performance. If this ongoing improvement roadmap does what its founder proclaims, it’s not entirely unrealistic to predict that the price could soar by the end of December. Once again, time will tell.
A Small Dose of Reality
Let’s still remember that other forces could dampen any bullish market embers. One concern involves a potential strengthening of the US dollar. As cryptocurrencies such as BTC are inversely correlated to its price, a stronger dollar may negatively impact market sentiment.
There are also questions related to whether altcoins will be capable of charting a recovery after relatively little action in recent times. Especially Solana, which saw dramatic losses over the past month. If they fail to gain momentum, we may be in for another sluggish month. On a final note, the past month’s liquidity issues associated with FTX and the subsequent fallout shows that no crypto company is too big to fail. This has already shaken the markets and we have to wonder if it will leave a bad taste in the mouths of some investors.
Full Steam Ahead for 2023?
Although we’d like so say that a bullish market outlook is a certainty, nothing is set in stone. With the Bitcoin Halving event set for sping 2024 by most estimates, 2023 should see accumulation begin. Why? Each halving up to now has preceded two big bull markets – 2016/17 and 2020/21. In both years on both these occasions new all time highs were set. There are indeed plenty of indicators that seem to point in this accumulation direction and this could hint at things to come. As always, be sure to follow Crypto Lists for the latest news and predictions.
Disclaimer: Crypto is extremely volatile and not suitable for everyone to invest in. Never speculate with money that you cannot afford to lose. The information on this site is presented for educational purposes only and should not be construed as investment or financial advice.