The bear grip that held the crypto market down throughout 2022 started waning in January 2023. Here are the four established cryptos expected to take full advantage of this and post the biggest comeback.
A series of macro factors and others specific to the crypto industry ushered in what turned out to be one of the most devastating bear markets in 2022. It started with interest rate hikes by the fed to tame runaway inflation.
Before long, Luna – Terra’s algorithmic stablecoin – imploded. Celcius Network, Voyager, and Three Arrows Capital followed suit right before Alameda and FTX – the second-largest crypto exchange in the world – collapsed.
These resulted in an extended bear market that wiped more than $1.4 Trillion off this nascent industry’s market valuation. But the violent erosion in valuation was harsher on some coins. Solana, for example, shed 97% of the ATH set in early November 2021 when it crashed to $8 on 29th December 2022.
Moving forward, analysts are optimistic the market is ready for recovery – evidenced by the surprise gains made by most coins in January 2023.
This post will look at the top four crypto gainers in January that we believe are set to make the biggest comeback in 2023.
Bitcoin rallied 40% in the first 30 days of January and recaptured the elusive $20K mark. It just had its best month since October 2021, a move that has the market – especially altcoin investors excited about a possible recovery. Goldman Sachs even named it the ‘Best Performing Asset in 2023.’
The BTC rally was triggered by a cooling inflation that analysts believe will result in slowed interest rate hikes by the FEDs throughout 2023. This would see investors turn their attention back to high-risk assets like BTC, effectively sparking a rebound for the largest and most valuable cryptocurrency. Watch out for the market’s reaction to the FED interest rate decision on 1st February as it will play a critical role in setting BTC’s pace for 2023.
Though it still is a relatively new altcoin, Solana had its worst year yet in 2023. An extended bear market, Cardano’s aggressive developments in late 2021 to early 2022, and its unending downtimes were the first to chip away at its valuation, pushing its price down and away from its 2021 ATH.
It, however, was its close association with Sam Bank-man Fried and FTX collapse that saw a number of analysts rule out SOL’s possible recovery. Pessimism towards the ecosystem especially reached new heights when SOL fell off the top 10 most valuable crypto list and dipped below $10 in LATE December 2022.
The layer-1 token blockchain, however, pulled a surprise when it bolted past $10 on the first day of the year. By 30th January, Solana was up by more than 250% – making this its best month in more than a year and setting the base for a possible bull run.
Of course, there is a threat that ripples from the SBF case may hurt SOL’s price action down the road, but no one expects it to have a significant effect on its recovery. At the time of writing, the general consensus in the market is that SOL will possibly break above $30 before the end of February and make a full recovery – rallying 1100% – before 2025.
Decentraland tokens are still selling more than 88% below the all-time high set in November 2021. But it promises to lead the metaverse cryptos out of the bear market rut that caused untold devastation to this budding niche throughout 2022. Like most other crypto industry players, Decentraland stepped into 2023 full of hope and rallied 270% in the first 30 days.
In addition to the favorable FED rate decision, slowing inflation, surprise crypto market rally, and BTC’s uptrend, multiple internal factors are driving MANA token prices up in 2023. For starters, Decentraland’s development team played ostrich to crashing MANA price throughout 2022 and concentrated on advancing the metaverse, growing its numbers, and improving its competitiveness.
Moving forward, further developments to this metaverse, like the supercharged SDK7 and monetizable user-generated content, are expected to continue pushing up MANA token prices.
Despite its ultra-fast transaction speeds, low gas fees, and bespoke consensus mechanism – Fantom smart contract platform continues to trail its peers. You would even be right to assume the layer-1 blockchain hasn’t received the recognition it deserves. This often translates to low transaction volumes, exposing it to massive price volatility.
For example, when the bears took over the markets in 2022, FTM token prices plummeted. By the time it found its support level of $0.16 in late November 2022, it had already shed more than 94% of its October 2021 highs.
However, the steps taken by its development team throughout 2022 and milestones set for 2023 promise to catapult Fantom to the crypto market limelight and FTM token price to a new ATH. In 2022, Fantom passed a resolution to reward developers with 15% as revenue from gas monetization. It also integrated and extended support for multiple dApps, exchanges, and wallets. All these saw the TVL, daily transactions, and the number of active addresses for the altcoin rises significantly.
Moving into 2023, Fantom seeks to position itself as the best dApp ecosystem. Equally important, Fantom will launch version 2 of the Fanton stablecoin (fUSD). These past and expected network developments and a recovering crypto market have rebirthed investor interest in FTM. It also explains FTM’s 270%+ value gain in January 2023. Not forgetting the growing optimism within the crypto community that Fantom will recapture its 2021 highs and be the next big thing in the next bull market.
Still, Pay Close Attention to Inflation Numbers and Fed Activity
Macroeconomic factors like rising inflation and all its causative agents and FED’s reaction to this, especially its approach to interest rates, will play a critical role in influencing the crypto market direction. Therefore, keep an eye out for CPI reports, the FEDs approach interest, and, even more importantly, the crypto market’s reaction to both.
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Waichungo is a fintech and investment journalist with over five years of experience writing about personal finance, economic trends, crypto and blockchain technology, stock market analysis, and investment strategies. He is also skilled in writing news and commentaries about crypto, stocks, mutual funds, forex, commodities, derivatives, private equity, hedge funds, and real estate.
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