Christmas has come and gone and we are now just a few days short of saying goodbye to 2022 — a year that many cryptocurrency investors and traders would perhaps best like to forget.
What Happened: Since it is possible to trade Bitcoin BTC/USD, Ethereum ETH/USD and Dogecoin DOGE/USD during the holidays, it is pertinent to consider how to approach digital assets during the holiday season.
Benzinga discussed holiday cryptocurrency trading and the upcoming year with OANDA Senior Market Analyst Edward Moya and Amsterdam-based cryptocurrency trader Michaël van de Poppe.
Major Coins During Holidays: Moya said that Bitcoin’s performance will benefit from standard holiday trends but the likely focus will be on whether the U.S. Federal Reserve is nearly done with raising rates. On Ethereum and Dogecoin, Moya said, “Ethereum will eventually trade on technological adoption but for now it will follow whatever cues Bitcoin takes from the broader markets.”
Dogecoin interest is "fading," according to Moya but it could get a "boost if Musk follows through on plans to make dogecoin an accepted form of payment."
"If Twitter does come out with their own wallet, that could be good news for dogecoin, but mainstream acceptance still seems unlikely.”
Expect the Unexpected: Van De Poppe has some advice on how to trade coins during the period of time when trading volume usually is on the lower side.
“The only expectations were given that Bitcoin would be trending south and go lower, while social media remains to be significantly negative across the board. That's usually a good period to start investing into the actual asset,” said Van De Poppe.
However, Van De Poppe suggested inexperienced traders to avoid periods with volatility and when volumes are significantly low.
“Organic price action has often disappeared and that's why you see those 'chops' taking place in which price moves sideways for days, after which it drops by a few percent in 1 minute and it goes back into sideways notion. Avoid trading during these times.”
The trader advises instead to hold for a minimum of 3-6 months and build the ability to “learn and digest” information about markets.
“Evaluate your emotions and behavior during the past few years and start building. Right now is not the time to be trading, but right now is the time to be educating yourself so you will be a better trader during the better times.”
Buckle Up For A Bumpy 2023: The two analysts share their thoughts on how 2023 will pan out for the trio of Bitcoin, Ethereum and Dogecoin. Moya advised investors to brace themselves for a bumpy ride. “Buckle up, it will be a bumpy ride. Crypto is not trading on its own fundamentals and the broader markets could see enhanced volatility as uncertainty persists on whether the economy will have a recession or soft landing.”
Van De Poppe doesn’t see either Bitcoin or Ethereum to be making new all-time highs in 2023. He said, “What I think we'll be seeing is a case of a relief rally, in terms of 2019 perspectives. In that way, Bitcoin could run towards levels at $35-45K, to correct afterward. This would mean that Ethereum can come back towards $2,500-3,000 as well and show significant strength.”
Macroeconomics and regulation could be the two large influencers of Ethereum price action next year, according to the analyst.
Ethereum “would be showing more strength in the coming bull cycle as the fundamental growth through PoS will be starting to be seen. Remember, 2017 was also driven through Ethereum, now probably we'll see it again.”
On Dogecoin, Van De Poppe says he has “no idea” if the market is going to run upwards.
However, the trader concurred with Moya on the Elon Musk effect — “I think that the crucial variable of Dogecoin lies in the hands of Elon Musk, whether or not he'll be deciding to integrate Dogecoin into Twitter.”
Clean Up In Store: 2022 was dominated by the unraveling of LUNA Classic (LUNC), FTX, and other cryptocurrency platforms. The two analysts expect 2023 to be the year when regulations will take center stage.
“Crypto regulation and investigations will be the dominant theme, and if any fresh strains hit the crypto market, downward pressure could resume. Regulation could prove to be troubling for stablecoins or with crypto exchanges. 2023 will be the year lots of corrupt parts of the crypto market get cleaned up,” said Moya.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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