Crypto Market Update: BTC, MATIC Shine, ETH Holds the Door

The global crypto market has finally regained the $1 trillion mark in market capitalization. This position is notable considering the events plaguing crypto investors throughout 2022. The crypto bloodbath remained persistent with events like the Terra stablecoin crash, 3AC insolvency, FTX, and Celsius bankruptcy eroding investor confidence and leading to a drop in market valuations. However, there has been a positive shift across exchanges since the beginning of 2023, with Bitcoin and other top crypto assets hinting towards a gradual recovery. Let us take a look at these tokens, and try to uncover where they are headed from the current scenario. 

Also Read: Hong Kong Finalising List of Digital Assets for Retail Crypto Trading

Global Crypto Markets: Anticipating Regulation

The shockwaves from the aforementioned crypto disasters, along with several others, have aggravated the demand for a standard crypto regulatory framework. Financial regulators across the world are either currently drafting or finalizing their bills for the regulatory frameworks. The topic was raised prominently in the latest G20 summit under India’s presidency.

At present, the regulations vary greatly across nations in different aspects ranging from taxes, crypto asset definitions, KYC/AML requirements, and more. As per thought leaders in the crypto industry- a globally accepted standard will increase transparency, resolve issues of liquidity and restore long-lost investor confidence. The progress has been significant across the US, Europe, Japan, Singapore, Brazil, and more.

Also Read: Global Crypto Regulations: Changes in Crypto Law in 2022

Recent Crypto Market Trends

The top crypto assets by market share displayed a mixed performance throughout the previous week, with Bitcoin remaining in the green- a 4.5% hike on a week-to-week basis. The market capitalization remained firmly above the trillion-dollar mark including a 1.20% surge over the previous day. The current daily transaction volume stands at around $50 billion, reflecting a steady rise in investor interest. 

• Bitcoin(BTC)

The biggest cryptocurrency by market share, Bitcoin, finally stopped its downward trend. Recent valuations suggest a bullish run. From a technical perspective considering multiple parameters, there is the possibility of a slight pullback, which could drag its valuation to the $19k mark. However, BTC has been showing strong performances for the past 4 weeks, staying in the green, above $23,600, a 2.10% hike from its previous day’s prices. Bitcoin’s current market share is 42.4%, with a capitalization above $450 billion. 

• Ethereum(ETH)

Similar to Bitcoin, ETH rallied over 2.8% from the last day to a current price of $1636. Ethereum maintains a stronghold in the crypto market share, with a current capitalization value standing above $200 billion. There has been no noticeable change on a weekly basis. The Ethereum blockchain token is currently in consolidation, unable to power past its $1675 resistance mark set in November 2022. 

The impact of Fed rates to counter inflation and growth is evident. It is however necessary to note that its valuations are over 35% this year to date. In addition, the Merge and other upcoming upgrades(the Shanghai hard fork) will enable ETH to fare well in upcoming times. If it manages to cruise past the current resistance zone, we might as well see the world’s second-largest digital asset by market capitalization hovering around $2030, reaching a high of $3000.

• Ripple(XRP) 

Ripple (XRP) is currently trading at $0.413 with a market capitalization of $20.98 billion. The valuation will likely end the week above the 200-day SMA which has been observed in previous weeks as well. The bulls have been able to take control of important areas above key technical levels. But this strategy may be challenged in the coming weeks due to headwinds that are expected to emerge as central banks begin their first meeting of the year. 

The Q1 profit target is likely to be around $0.49, but it may be unattainable due to the lack of handles between the current price and the target. However, there could be a positive surprise if there is a change in stance from Jerome Powell and a favorable outcome from the SEC lawsuit, which would result in an increase in XRP price and reach $0.49, jumping over 20% in value. Overall, bullish investors may be disappointed in the coming weeks as the profit target is too far away and headwinds are expected to emerge.

• Polygon(MATIC)

Polygon(MATIC) has been one of the strong performers in recent times. The crypto token currently priced at $1.15 has shot up over 15% within a week, surging 1.53% overnight. Polygon is also increasing its presence in crypto market capitalisation, with a present cap exceeding $10 billion. 

Off to a strong start in 2023, Polygon has forged collaborations with Disney, Reddit, and Mastercard, along with launching a Web 3.0-based incubator. The network also declared plans to hard-fork, putting it in a strong position. Market sentiment favors MATIC and analysts predict prices could reach $1.2 short-term, $1.8 mid-term, and $2.5 by the end of the year. The network has also seen impressive growth in the NFT segment, with major companies partnering for non-fungible collectibles. Reports suggest that Polygon’s Web3 hosting capabilities will make it a key player to drive the booming metaverse economy, which is estimated to be worth $13 trillion by 2030. 

Wrapping Up

Analysts predict BTC’s price may drop in Q1-2023 due to the bankruptcy of miners(high energy costs and low profitability will force them to reorganize or merge). However, the impact will be short-lived, as Bitcoin continues to find uses as an inflationary hedge, remittance, and substitute against the dollar hegemony. The crypto markets look positive in light of the ongoing global geopolitical and economic events- with current financial institutions planning for large-scale crypto investments and nations planning to utilize crypto for asset tokenization, cross-border payment settlement, and many more.