Ethereum and the majority of cryptocurrencies intensified selling on Jan. 8 as investors failed to receive clear signals after the Fed’s intention to hike interest rates led to a sharp outflow of funds from risk assets.
The Crypto Fear & Greed Index fell to the extreme fear zone, hitting 10 points out of 100, low levels, seen since July 2021 thus indicating panic in the market.
In December 2021, Ethereum failed to break through and hold above the $4,000 price threshold, indicating a declining market. Ethereum touched lows at $3000 on Jan. 8, shedding nearly 22% after four days of negative price action since Jan. 4.
Veteran trader, Peter Brandt retracted his earlier tweet on Jan. 8 that Ethereum was in a bear trend saying ”Let’s face it when it comes to crypto I do not know what I am talking about. When I post something bearish it is time to buy. When I get bullish sell everything you own”.
Ethereum co-founder, Vitalik Buterin recently proposed a new ‘multidimensional’ Ethereum fee structure, in an attempt to improve the current fee structure for the network.
Ethereum trades at $3072 at press time.
Even though the crypto market is undergoing selling pressure, market experts still maintain their bullish outlook. For example, Block One co-founder, Brock Pierce is confident that bitcoin could reach $200,000 in 2022.
Governments are producing an excessive quantity of money, which is stoking inflation, and this will be the primary driver of BTC’s rise. “I wouldn’t be surprised if bitcoin trades for $100,000. It is quite possible that it can jump over $200,000 for a moment,” he says.
Antoni Trenchev, co-founder and managing partner of Nexo believes bitcoin has a bright future. He expects that bitcoin will hit $100,000 this year, possibly by the middle of 2022.
In a recent CNBC interview, John Wu of Ava Labs forecasted that the overall market valuation of digital assets could top $5 trillion by 2022. Most cryptocurrencies will have to at least double their market value, as the global market capitalization presently stands at $1.94 trillion.
According to the CEO of Ava Labs, cryptocurrencies will be the only asset class that can weather both the Fed’s policies and the US’s record inflation, which peaked in early December 2021 at its highest level in over 40 years. Wu further claims that when the crypto industry grows, bitcoin’s market dominance will fall below 30%, although its price may reach $75,000.
Kryptomoney reported in its Early 2022 Predictions for Bitcoin of Economist cum Cryptotrader Alex Kruger predicting a ”risk-off ahead of the next FOMC (Jan/26) if the next inflation print comes in too hot (Jan/12)”.
These two dates Jan. 12 and 26 may seem essential to Bitcoin price as investors seek further clues on Fed’s intention. Jan. 28 also marks the date of bitcoin’s options expiry.
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