Economist and crypto trader Alex Kruger is predicting that cryptocurrencies will revive right at the start of next year.
Kruger tells his 105,800 Twitter followers that, for the past four years, Bitcoin (BTC) has enjoyed a “first-week-of-the-year-effect” where it rallied by between seven percent and 36%.
“First week of the year effect
$BTC returns first week of:
2021 +36%
2020 +13%
2019 +7%
2018 +18%
Bears killed Santa, but have you heard of the Wise Men?”
According to the economist and crypto trader, cryptocurrencies will surge in early January before the sentiment turns bearish ahead of a Federal Open Market Committee (FOMC) meeting to determine US monetary policy.
“Still expect a strong crypto ‘up’ market in early Jan driven by fund inflows.
Then risk-off ahead of the next FOMC (January 26th of 2022) if the next inflation print comes in too hot (January 12th of 2022).”
Asked about his outlook for next year, Kruger says that the wider crypto asset sector could go up by at least 30% and up to 50% in 2022.
“+30% / +50%
Both bulls and bears will be disappointed.”
The Federal Reserve signaled in mid-December after a rise in inflation that there will be a minimum of three interest rate hikes in 2022.
About a week ago, Kruger said that higher interest rates will favor traders over holders.
“Hiking ≠ bear market
Hiking = headwind (ceteris paribus shallower slope), increased volatility
This calls for carrying higher cash balances and for more aggressive profit-taking, i.e. more of a traders’ market than a holders’ market.
Not for doomsday views.”
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