There’s a lot to be desired from cryptocurrency market in new year, but we are unlikely to start 2023 on high note
Apart from the nonexistent liquidity and volatility on the cryptocurrency market, some analysts are noticing an unpleasant recovery tendency on the U.S. dollar index that may lead to another plummeting on the cryptocurrency market, which is already going through a tough end to the year.
What to expect from XRP and others?
The price performance of XRP in 2022 was a series of ups and downs: at the beginning of the year, we saw a 60% spike to $0.9, and by the end of the year, the cryptocurrency’s price tumbled to $0.34. However, considering the market’s performance in the background, XRP did relatively well, losing “only” 56% of its value compared to Jan. 1.
In the next year, we are not expecting any explosive performances from usage-dependent assets like Ethereum, Solana or Matic. The cryptocurrency industry will probably stay passive as the majority of inflows providers are not yet ready to return. This means that XRP and its counterparts will have to go through a stalemate stage for a few more months.
Cardano reaches new lows
If you are not used to Cardano’s continuous battle for good placement on the market, then you have not been following the cryptocurrency market for long. Throughout this year, Cardano could not find any way to retrace and rally upward due to the poor performance of the market, and the network in particular.
Despite the high development activity, Cardano’s usage as a network for NFTs and DeFi is still too low to create favorable conditions for ADA’s market growth. After reaching an almost six-month low on the daily chart, ADA might show us a short-term bounce, but it will most likely happen only in the new year.
DXY’s reversal potential
The macro conditions of the U.S. economy for the cryptocurrency market remain strict: the inflation target has not been reached by the Fed yet, and regulator made it clear that the market’s performance is not their main priority. This means that rate hikes will continue in 2023, along with pressure on risk-on assets, including cryptocurrencies.
According to the index’s daily chart, DXY is showing some reversal patterns. The value of the index straightened out, volume is decreasing, as is volatility, which is the perfect trifecta for a trend reversal, from a technical standpoint.
However, we should not jump to conclusions as at least two of those factors could be the result of the holiday season on U.S. markets, and we might see a swift recovery of the aforementioned metrics after Jan. 3.
Unfortunately, there is a possibility of a negative scenario: in the case of DXY’s reversal, we would see an increase in the pressure on the cryptocurrency market, which may lead to yet another plunge to new lows.