The first week of the new year did not bring as many reasons for optimism as we would have liked. CoinsPaid Media has prepared for you a selection of the most important crypto market events that happened from January 1 to January 6.
This is our fifth weekly digest. While earlier it was only available in Russian and only on our YouTube channel, now it will be published in a text version for all our readers.
BTC Price Fluctuations over the New Year
Bitcoin price met the New Year holidays without any serious fluctuations. The cryptocurrency was trading above $47,000. Things began to change on Monday, January 3. First, quotes started to go below $47,000, and by the evening, Bitcoin fell below $46,000. The next two days, the rate fluctuated between $46,000 and $47,000 until the evening of January 5, when it fell sharply below $43,000. The drop occurred amid anti-government protests in Kazakhstan since the country was hosting 18% of all Bitcoin mining.
Another critical factor, which influenced the Bitcoin value decline, was news about the Fed’s readiness to increase the base rate earlier and faster than expected. On the morning of January 6, Bitcoin was trading around $43,000.
Near-Term Prospects for BTC by Expert Opinion
Crypto analyst Benjamin Cowen said that Bitcoin should not be expected to grow significantly in Q1 2022. To return to the uptrend, the asset will need to consolidate above the 20-week moving average, standing at $53,000. According to the analyst, Bitcoin will stay in the correction phase for a few months before returning to parabolic growth.
Trader Michaël van de Poppe shares the same opinion. He believes that Bitcoin needs to overcome an important resistance zone of around $49,500 to exit the correction phase. In the analyst’s view, the next critical resistance level is about $52,000.
Goldman Sachs: Optimistic Forecast for Bitcoin
Longer-term forecasts seem more upbeat. Thus, Goldman Sachs Bank believes that Bitcoin may rise in price up to $100,000 over the next five years. It will be possible if Bitcoin’s share of the store of value market grows up to 50%. Currently, the BTC share of this market is about 20%.
Altcoin Season and a Double Growth of the Crypto Market in 2022
Trader Nicholas Merten shared an observation that investors are massively transferring capital into alternative coins because of Bitcoin’s long stay in a “sideways” movement. According to the analyst, the altcoin market will show significant growth in the near future. As of January 6, the dominance level of Bitcoin in the market is about 40%.
In an interview with CNBC, Ava Labs president John Wu predicted that the crypto market capitalization would exceed $5 trillion in 2022. In his opinion, digital assets have enough cumulative potential to double their market value in the coming year.
What Else Happened in the First Week of January
Among the most remarkable events, according to our editorial team, are the following:
- Ethereum co-founder Vitalik Buterin revealed on the Bankless podcast that the full implementation of the altcoin roadmap would take about six years. In Buterin’s opinion, about 50% of all the ideas have been realized in the Ethereum network at the moment, and by the end of the year, that figure will increase to 80%. Ethereum’s transition to version 2.0 should be one of the most significant events of the crypto world in 2022.
- China released a wallet app for the digital yuan. The app is now available on mobile phone app stores. The initiative developer is the People’s Bank of China’s (PBOC) Digital Currency Research Institute. However, the application is still in a research and development mode and is only available to users who are physically located in China.
- The Federal Reserve Bank of Boston is looking to hire a new director of product management to lead its CBDC. The digital currency is being developed in a collaborative effort with the Massachusetts Institute of Technology. The project aims to create, manage and test software to understand digital currency further. The research is called “Project Hamilton,” and its results are publicly available.
Of course, this is not all the crypto news over the past week. More updates can be found on our website and social networks daily!
