Bitcoin looks to hold its current zone, while altcoins start a possible good time for input.
Looking back at the macroeconomic scenario, we had yet another interest rate hike from the Fed, which means more pressure on the markets and more risk of recession.
Bitcoin still in search of bullishness
Bitcoin, which recently celebrated the fourteenth anniversary of the creation of its white paper, completes 1 year of bear market this month. In the year 2021, BTC indicated the loss of the bullish continuation in the same month; now, the asset is still struggling to hold above $20,500, trying a new high to take the price up to at least $22,000.
In the bear market scenario, altcoins are the cryptocurrencies that suffer the most from low market capitalization, compared to bitcoin and ethereum. As they are initial projects and in development, the assets become even more speculated and used for an asymmetry of profitability by investors.
The alternative cryptocurrency chart has been showing an important indicator, which presents an alleged support and the formation of a new bottom. This would be confirmation that it is a great region and a great time to start investing in altcoins, waiting for the next bull run.
Fed, interest rate hikes, and recession
The Federal Reserve Bank, Central Bank of the United States, announced another consecutive increase of 75 basis points in its interest rate and reached 4% in total, a decision that much of the market was already waiting for. The most interesting so far would be the stance that the Fed chairman would take in the next meetings regarding monetary policy decisions.
Jerome Powell was very hawkish (referring to the stance used by the Central Bank when there is an intention to increase or maintain high interest rates in the country) and concerned about the country’s scenario, stating that inflation remains strong and the job market is not has shown improvement; that is, unemployment remains below expectations.
This position leaves an even bigger question mark in the minds of investors for next year: are the economic problems bigger than we imagined? Powell had already spoken that we could reach numbers above 5.5% in the total interest achieved.
The market, which irrationally priced that it could be a certain “exaggeration”, is now beginning to realize that even before the turn of 2023, the added increases have already reached 4% and there will still be a probable increase of at least 0.5%.
This scenario starts to worry even more when we see companies anticipating large losses, such as Meta (Facebook), which from the last week to the present day has accumulated more than 30% negative, and Amazon, which has already reached in the same period more of 20% loss.
Normally, in previous crises, when the country had problems related to the loss of economic stimulus, the solution taken was to print money to provide liquidity to the market and heat up the economic scenario.
This time, the issue is precisely the excess of printed money, a decision that was made for the market to stay warm in the world pandemic period. Now, to get that amount of liquidity out of the market will be a painful and slow process.
In the new market, this impact is also felt. Cryptocurrencies have already lost more than 70% since last year, mainly due to lack of liquidity in general.
The future of the market
Fortunately, not everything is doomed. The cryptocurrency market has been updated a lot and every week we have seen news in many projects. The cool thing to observe is that the cryptomarket, in a kind of “bubble”, created updates for its own niche, and the technologies developed are drawing the attention of big techs, which are now starting to enter more and more and increase interaction. with the traditional market.
Cryptocurrencies are a new form of money and investment, created to be independent of the state and governments as a way of saying “We don’t agree with how you run this “machine”, so we will create our own in a decentralized way and totally independent of you. ”.
With each passing year, the migration to the crypto market increases sharply, even with a loss of value of more than 50% in total. This shows that the coming years tend to bring a gigantic dominance of cryptocurrencies regarding money as we know it.
Bitcoin, the first cryptocurrency created in a fully decentralized way and which continues to grow until today, is in its third Halving of 32 to reach its 21 million coins created.
For students of cryptocurrencies and the economic landscape, this number is astonishing and gives a lot of hope for the coming years and generations, as well as showing that we are just at the beginning of a new digital and decentralized era.
Even the investor who is just entering the market, thinking that bitcoin is expensive today, must remember that we are past the times when it was easy to have hundreds or thousands in storage. We are in the generation of bitcoin units and entering the era of accumulating satoshis. As the years go by, it will be extremely difficult to get large sums of BTC.
So, once again, here’s the tip for you, cryptocurrency investor trader: study and understand that you are in an early stage market, whose growth will be even greater than we can currently imagine.
To know how to continue following the macroeconomic scenario, bitcoin and altcoins, come to Foxbit’s Discord to chat with our community of traders and experts who are always connected to the main market events!