Some cryptocurrency market analysts are highlighting the potential for a first green week in the cryptocurrency markets in January. as part of what economist and trader Alex Krüger calls the “first week of the year effect.”
Krüger pointed out in a Tweet from December 29 that For the past four years in a row, Bitcoin (BTC) has enjoyed positive returns in the first week of January ranging from 7% to 36% between 2018 and 2021.
In 2021, BTC went from $ 28,653 to $ 41,441 in the first week of January.
When asked what had happened in previous years, Krüger answered: “To be fair, only 2020 and 2021 matter, different markets, so do with those two data points what you want. “
Still expect a strong crypto up market in early Jan driven by fund inflows. Then risk-off ahead of the next FOMC (Jan / 26) if the next inflation print comes in too hot (Jan / 12).
– Alex Krüger (@krugermacro) December 28, 2021
A strong cryptocurrency market is still expected in early January driven by inflows of funds. Then risk-off before the next FOMC (January 26) if the next inflation impression comes very hot (January 12).
His optimistic outlook for early January comes from his expectation of strong “inflows of funds”, which appears to be in line with the sentiments of Real Vision CEO Raoul Pal.. He said in an interview on YouTube on December 27 that he believed that Bitcoin sales were over, and that January would be off to a strong start as institutional capital is reinvested in the market.
ExoAlpha CEO David Lifchitz believes that Institutions continue to sell even with less than 24 hours to 2021 in order to block tax losses. It is possible that the rebound of the first week of January has a correlation with the phenomenon.
The CEO of fintech and wealth management firm deVere Group, Nigel Green believes that December has been set up as Bitcoin’s worst monthly result since May 2021 due to what he calls “panic sellers practically giving away their cryptocurrencies to wealthy buyers.”.
However, it is bullish on the largest cryptocurrency by long-term market capitalization. Green believes that Bitcoin can protect investors from global inflation, and that “borderless, global and decentralized currencies are the future”.
Nevertheless, not everyone is bullish on cryptocurrencies in 2022.
University of Sussex finance professor Carol Alexander told CNBC that BTC could drop to $ 10,000 in 2022. However, she is a skeptic who believes that BTC does not have any fundamental value and that it has already reached its peak in this cycle.
A more informed opinion comes from Todd Lowenstein, Union Bank’s chief equity strategist. Your opinion is that “Goldilocks conditions” such as the COVID financial stimulus packages and low interest rates that benefited high asset prices are coming to an end, which will have a significant negative impact on the price of BTC and traditional markets in 2022.
“Goldilocks conditions are ending and the liquidity tide is receding, disproportionately hurting overvalued asset classes and speculative areas of the market, including cryptocurrencies.”
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