Analysts expect the bear market to loosen its grip in 2023. Here are five cryptocurrencies to watch.
It’s been a turbulent year for crypto investors, who have seen the total crypto market cap fall from around $2.2 trillion in early 2022 to around $850 billion in December. The sharp fall in value was caused by several high-profile bankruptcies in 2022.
The entire Terra ecosystem imploded with the collapse of its LUNA token and stablecoin TerraUSD (UST). The failure of Three Arrows Capital followed this black swan event and the final blow came when FTX banked and imploded. These consecutive events triggered a liquidity and credit crunch and seem to have done the most damage to the crypto industry.
A sustained bear market tends to test investors’ patience, but presents one of the best opportunities to buy fundamentally sound cryptocurrencies at lower levels. Savvy investors who can swim against the tide and invest in times of panic usually benefit the most when the trend finally turns.
Daily crypto market data view. Source: Coin360
While a bear market is the perfect time to build a portfolio, traders tend to make the mistake of buying the coins that have fallen the most, hoping they will regain their former glory. Most of the time this doesn’t happen because every bull market has a new set of leaders. In general, those who are resilient in the fall or recover quickly from the bottom lead on the way up.
Let’s take a look at five promising cryptocurrencies for 2023.
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The broader cryptocurrency market is unlikely to start a new bull run ahead of Bitcoin
staged a reversal. Although Bitcoin has been in a strong downtrend for several months, the Relative Strength Index (RSI) is forming a positive divergence, suggesting that the bearish momentum could be weakening.
BTC/USDT weekly chart. Source: Trade View
However, positive divergence must have favorable price action to confirm a trend reversal.
The first sign of strength will be a breakout and a close above the 20-week exponential moving average (EMA) of $19,870. The BTC/USDT pair could rally to $25,211 where the bears could mount strong defenses again.
If the price falls from this level and then bounces off the 20-week EMA, it will signal a switch in sentiment from selling on rallies to buying on the declines. This could increase the possibility of a break above $25,211.
The pair could then reach the 50-week simple moving average (SMA) of $28,156. This remains the key level for the bears to defend as a break above it could herald the start of a new uptrend. The bears could face a small hurdle near $32,400, but it is likely to be breached and the pair could reach $50,000.
However, the downtrend could resume if the price breaks down from the current levels or the 20-week EMA and below $15,476. The next major support on the downside is $12,500 and $10,000.
BTC/USDT daily chart. Source: Trade View
The pair has been trading below $17,622 for several days but the bears failed to capitalize on it and continue the downtrend. This suggests that selling is drying up at lower levels.
The 20-day EMA ($17,021) has flattened out and the RSI is near the midpoint, indicating that the bears may lose their footing.
If the buyers push the price above the overhead resistance, it will signal a possible trend reversal. Confirmation will come after the bulls turned the $17,622 level into support. This could set the stage for a rally to $25,211.
is in a strong downtrend, but a small bright spot is that it is finding support near the psychological $1000 level. The repeated rises to the 20-week EMA ($1,428) also indicate sporadic buying by the bulls.
ETH/USDT weekly chart. Source: Trade View
Although three rallies have been rejected at the 20-week EMA in the past few weeks, the bears have failed to pull the ET pair