Unlike 2022, this year hasn’t seen crypto breaking the internet multiple times every other month. The entire sector has been much quieter due to the bear market born after the craze in the summer of last year. But things are finally looking up for the crypto community as we head towards the end of 2023. Let’s find out why.
The Current Environment
After a brutal 2022 bear market, the crypto market has finally shown some positive momentum in the last 60 days. Leading cryptocurrencies like Bitcoin and Ethereum have seen a significant rise in their prices during October. The 10th month has been dubbed “Uptober” by many enthusiasts as it was the second most positive month of the year for the entire crypto sector, lagging only behind January. Bitcoin even reached the highest monthly close since May of 2022 by closing in at $33,334.
Important reasons
Several factors have contributed to this bounce back. First, inflation rates have started to cool, reducing economic uncertainty. The Fed has also slowed its aggressive interest rate hikes, easing liquidity pressures on risk assets like crypto. Furthermore, the meltdown of major crypto firms like Celsius and FTX has removed excess speculation and overleveraging from the market.
With macro conditions improving and excesses wrung out, the crypto markets appear primed for a sustained recovery as we head into the end of 2023.
Experts Predict Further Gains Through End of 2023
In light of the recent momentum, many crypto experts and analysts believe prices will continue rising until the end of 2023.
According to CoinDCX, Bitcoin’s price is highly likely to soar above $40,000 by the end of the year. The month of November is predicted to close at around $38,000. CoinDCX isn’t alone in its prediction. Experts like Matrix port, BitQuant, and Elliot Wave all believe that Bitcoin along with the other major cryptocurrencies including Ethereum will finish the year on a strong note.
The major players dictate the market’s pace. As mega coins like Bitcoin and Ethereum go up, the rest of the market will also level up.
Macroeconomic Trends Supportive of Higher Prices
Several macroeconomic trends point to tailwinds for crypto as 2023 comes to an end. Inflation remains high on a historical basis but has fallen substantially from its peak of 9.1% in June to around 7.7% in October. This should allow the Fed to moderate interest rates, providing relief to equities and crypto. A looming global recession has softened commodity prices, reducing geopolitical and inflationary pressures. If these trends continue, risk assets like crypto could benefit.
There are several other trends—that although not as solid as the ones we’ve discussed—point towards the bull market continuing for the upcoming months.
Long-Term Holding Remains the Best Crypto Strategy
Given the positive momentum in crypto but still high volatility, most experts advise a long-term holding strategy. Trying to time short-term peaks and troughs is extremely difficult. Rather than trading actively, accumulating positions in high-quality crypto-assets and holding through market cycles has proven the most successful strategy historically.
As blockchain technology continues maturing, crypto is cementing itself as a unique digital asset class. Its long-term adoption trajectory remains intact, despite short-term price volatility. With this mindset, holding quality crypto projects for the long term represents the most prudent strategy as we end 2023.
Timing the Market is Risky, But DCA Makes Sense
Trying to perfectly time entries and exits in crypto markets is nearly impossible and exposes investors to timing risks. A better approach is dollar cost averaging (DCA), buying smaller amounts at regular intervals. This allows investors to smooth out their entry price instead of making one large purchase at the wrong time.
DCA takes the emotions out of investing and avoids making big bets on short-term price movements. For investors who believe in crypto’s long-term potential, DCA represents a sensible way to accumulate positions without taking on excess risk as 2023 comes to a close.
The Bulls are Back, But Caution Remains Warranted
In summary, optimism is returning to crypto markets following a brutal bear cycle. However, risks remain elevated, and volatility is likely to persist. Perfectly timing the market is difficult, making a long-term, DCA approach the best way to gain crypto exposure for most investors. With prudent risk management and proper portfolio construction, 2023 could close out on a high note for crypto holders. But caution is still warranted in these traditionally turbulent markets.
Instead of a conclusion
Do you want to convert your Bitcoin to USD? HiRiBi is here to help by offering the best rate for exchanging Bitcoin on the market. Due to its unique algorithm, HiRiBi constantly monitors the market and always presents its users with the best offers available at the moment. You can sell bitcoins for nearly 30% higher than the average market rate. That sounds great, right? You will be pleased to know that HiRiBi is an anonymous service that only requires your email to work. Plus, it has great transaction speed, so you will be able to convert your Bitcoin to USD in no time.
Most commented