Altcoins to Buy in 2022, Bitcoin, Ether Price Forecast: Crypto Traders Business Insider

• Crypto and stocks remain under pressure from the hawkish kingpin of the Federal Reserve.
• Some traders believe that rising rates and tighter policies could push bitcoin down to the $30,000 level.
• But they remain optimistic about the long term and meanwhile share what’s on their radars.

Bitcoin and Ethereum are trading in similar ranges to their price levels last year, but investor sentiment in the crypto market couldn’t be more different this time around.

The euphoria over bitcoin’s rapid ascent from $20,000 in December 2020 to $40,000 in January 2021 has been replaced by distress over whether the largest cryptocurrency peaked at $69,000 in November.

Financial markets, which have been fueled by accommodative monetary policies and massive fiscal stimulus since the start of the Covid-19 pandemic, face three or four rate hikes this year as the

Federal Reserve

is preparing to reduce its bond portfolio by $8 trillion. With US inflation at its highest level in nearly four decades, some economists and strategists predict five or as many as seven rate hikes in 2022.

The prospect of

liquidity

pullback and tightening policies have battered equities. As of Wednesday’s market close, the S&P 500 had plunged 4.9% year-to-date, while the Nasdaq was down 10.7% from its November 19 peak, officially placing it in a fix.

“We’re in a market environment where cryptocurrencies are very much tied to what’s happening with the fundamentals of the traditional financial market space. And that’s kind of what’s dominating the price action right now. “said Joel Kruger, market strategist at LMAX Group, in an interview.

As risk appetite declines across the board, traders have positioned themselves accordingly. Bitcoin’s risk reversals, which calculate price differences between puts and calls, have turned positive, signaling growing demand among traders for hedges against possible downward price action ahead, according to CoinDesk.

Meanwhile, bitcoin perpetual futures open interest on all exchanges also reached an all-time high of around 250,000 BTC, leading to “big pivots in price action” since April 2021. , according to a Monday Glassnode research note.

Bitcoin could dive further to around $30,000 in the near term

For those watching the technicals, bitcoin could drop as low as $30,000 in the near term before resuming an uptrend, according to Armando Aguilar, independent crypto analyst and former digital strategist at Fundstrat.

The Relative Strength Index, which shows whether an asset has been overbought or oversold, has seen bitcoin hit resistance at the bottom but has yet to reach the oversold level. Meanwhile, bitcoin’s moving averages are looking for a break higher to continue their positive momentum, he explained.

“If we are unable to sustain this momentum based on the RSI and MACD, we could see new lows,” Aguilar said in an interview. “I wouldn’t be surprised to see all of these indicators kick in and cause another major selloff where we could see bitcoin potentially hit $30,000 or even lower.”

With notable speed bumps ahead, Kruger also sees bitcoin expanding lower in the coming weeks, but remains bullish over the medium to long term.

“We should see these markets exceptionally well supported for the next major breakouts up through $100,000 and towards $10,000 respectively when talking about the price of bitcoin and ether,” he said. “I think it’s very possible that we’ll see some movement by the end of the year.”

In the meantime, Aguilar suggests investors reduce their exposure to volatile price movements by allocating some of their assets to stablecoin-based yield products until the market recovers.

Altcoins, NFTs and DeFi

Even at $42,000, bitcoin’s high price intimidates many retailers. This not only eroded bitcoin’s dominance in crypto, but also sparked the exponential rise of altcoins in 2021.

So far this year, investors have turned to even smaller altcoins that haven’t grown a hundredfold over the past year. The two tokens on Aguilar’s radar right now are close (NEAR) and Phantom (FTM).

The NEAR token, which was trading at $17, fell 6% in the past week, but rose 607% in the past year. The FTM token, which was changing hands at $2.89, has surged 12% and 9,669% in the past week and year, respectively, according to CoinGecko prices.

Altcoin takes it aside, it’s the big trends that are exciting institutional investors like Paul Eisma. The head of trading at crypto-finance firm XBTO is keeping a close eye on non-fungible tokens and decentralized finance this year.

NFTs have been a silver lining among crypto market whipsaws. The largest NFT marketplace OpenSea received over $2 billion worth of Ethereum in the first two weeks of January and is on track for a record month of Ethereum NFT transaction volume, according to Arcane Research.

Amid the rise of NFTs, DeFi quietly increased its total value locked from over $18 billion in January 2021 to $239 billion at the end of last year, according to DeFi Llama. Eisma is positive about the growth of NFTs and DeFi as they represent the gateways to onboard a significant number of users to crypto.

“DeFi is going to be huge in 2022 and NFTs aren’t going away,” Eisma said in an interview. “When unencrypted people start using the technology without knowing what the underlying base is, that’s when you accelerate engagement.”