Bears have dominated the last month in the crypto market. We have witnessed high sell-offs on most altcoins while Bitcoin and Ethereum maintained their values. Sales were primarily concentrated on DEFI coins. We've seen more than 15% drops in the coins of LIDO DAO, Pancakeswap, Uniswap, and Thorswap.
The past month hasn't been good for play-to-earn and metaverse coins, either. We have witnessed double-digit drops in the currencies of projects such as Splinterlands, Apecoin, Sandbox, Axie Infinity, and Decentraland. The weak outlook continued after the Fed's 25 basis point rate hike.
2023 is often compared to 2019 by analysts. In the second half of 2019, the price of altcoins declined. Analyst Benjamin Cowen suggests that a similar scenario will apply to 2023. Nowadays, many analysts recommend Bitcoin and state that altcoins should be avoided.
Those who acted following the generally accepted view missed the Bitcoin-led rally in January 2023. Those who act following today's generally accepted view may also miss a possible altcoin rally.
A final pullback in Bitcoin price was expected in the fall of last year. The expected retracement did not happen, and Bitcoin increased by 75% in 2023. Currently, no analyst suggests that the Bitcoin price will drop dramatically. Today's mainstream analysts argue that Bitcoin will absorb liquidity from the market. Altcoins will not rise while Bitcoin rises, and altcoins will fall when Bitcoin is falling! I have two criticisms of this view.
Ethereum has reached a different position from the previous bear market. The Ethereum network is widely used thanks to its DEFI and NFT implementations. As a matter of fact, Ethereum showed a strong appearance last month, similar to Bitcoin. Therefore, Ethereum should not be considered as an altcoin anymore.
In 2019, many altcoins did not have a tangible use case. In the past four years, the situation has changed. Most of the blockchains are currently in use. In addition, interest rates were not high in 2019. Therefore, there was no expectation that interest rates would decrease in the upcoming months.
For now, Bitcoin and Ethereum are leading the crypto market. They accumulate strength below their resistance bands. Both are trading above their critical moving averages. Below is the chart of Ethereum for the last six months. A distinct uptrend appears on the chart.
We see a similar uptrend in Bitcoin. Bitcoin price has made two strong rallies at 2-month intervals.
After the Bitcoin price rose from 20k to 27.5k, it started a band movement. Bitcoin is like an older adult resting and recovering at every step. It takes the steps carefully.
TL;DR
Investors started to show interest in risky assets as of 2023. They take their steps cautiously, as the memory of last year's losses is fresh. It is easier to make predictions now that interest rates have been clarified at the last FED meeting. Bitcoin, Ethereum, and Nasdaq have been in an uptrend in the past six months. The disaster scenarios predicted by the bears did not materialize, and investor confidence is rising slowly.
It is difficult to predict when Bitcoin and Ethereum will overcome the resistance points and start a new rally, but they can easily stay above the resistance levels.
When will the last significant price drop the bears have been waiting for happen? I hope it will never occur!
How long should we wait for the altcoin rally many of us are looking forward to? I predict that Bitcoin and Ethereum will rise first, followed by altcoins. The Hive price increases in August. That was the case for 2020, 2021, and 2022. Why would 2023 be an exception?
Thank you for reading.