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Bitcoin and most of the major altcoins are trying to recover from their strong support levels, indicating that traders continue to buy on the lows.
Alex Kruger, economist and crypto trader, predicts that cryptocurrencies will resurface early next year.
Kruger tells his Twitter followers that Bitcoin (BTC) has had a “first week of the year effect” for the past four years, with the price increasing from 7% to 36%.
The crypto market is expected to grow 30% to 50% in 2022
Cryptocurrencies will rise in early January, according to the economist and crypto trader, before sentiment turns sour ahead of a Federal Open Market Committee (FOMC) meeting to determine US monetary policy.
Still expect a sharp rise in the crypto market in early January, driven by inflows. Then take the risk before the next FOMC (Jan 26) if the next inflation impression is too hot (Jan 12).
– Alex Krüger (@krugermacro) December 28, 2021
When asked about his forecast for the coming year, Kruger predicted that the global cryptoasset industry would grow by at least 30% and up to 50% by 2022.
He adds that the bulls and bears will be disappointed. Following a rise in inflation, the Federal Reserve announced in mid-December that there would be at least three interest rate hikes in 2022.
Kruger recently said that raising interest rates would benefit traders rather than investors.
He says the hike is not equal to the bear market, rather it is equal to a headwind (shallower slope ceteris paribus) and increased volatility. It requires more liquidity and more aggressive profit taking i.e. a traders market rather than a holders market. Not for those who believe in the Last Judgment, he adds.
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