The Nasdaq Crypto Index (NCI) closed Sunday (01/01/23) 0.8% below last week’s closing. The index’s neutral performance was influenced by bitcoin (BTC), down 1.1%, while ether (ETH) fell 0.5%.

 

 

Looking Ahead 

 

Trading volume should pick up as investors embrace the new year. BTC has been trading within the $16,000 to $17,000 range since mid December. Digital asset prices have been moving in tandem with US stock indexes, which have been impacted by the soaring number of covid cases in China. 

Highlights of the macro calendar include jobless claims on Thursday and nonfarm payrolls on Friday (both out of the US). After the encouraging CPI and PCE readings in the tail end of 2022, the stubborn resilience of the US job market is likely to be a major focus for investors in the onset of 2023. 

 

Last Week’s Price Action 

 

Coming into the last week of a tough year for crypto markets, investors were hoping for uneventful days ahead of new year celebrations. Despite the U.S. markets being closed for the Christmas holiday (12/26), crypto asset prices started the week trending up, with BTC and ETH each gaining about $100. BTC and ETH hit their respective weekly highs of $16,895 and $1,226 on Monday night (EST).

On Tuesday, crypto markets went into the red following the lead of equity markets. The negative performance of the S&P 500 and Nasdaq Composite reflected Russia’s announcement that it would not be selling oil to countries that enforced a $60 dollar price cap on its barrels.

Prices continued to slip on Wednesday, with crypto markets still mirroring the performance of US stock markets. Investors were reacting to growing COVID fears as Chinacontinued to loosen lockdown policies. The tech-heavy Nasdaq registered its lowest closing (10,213.288) since July 2020. ETH hit its weekly low of $1185 shortly after US markets closed. 

Still on Wednesday, cash-strapped North-American crypto miner Argo Blockchain (ARBK) announced that it had staved off bankruptcy after selling a 180 megawatt West Texas facility to Galaxy Digital for $65 million and receiving an additional $35 million in the form of a loan.

On Thursday, most digital asset prices registered a slight recovery on the back of news that weekly US jobless claims (225,000) exceeded expectations (223,000) and continued trending upward (previous week: 216,000). 

Equity and crypto investors interpreted the news as a sign that the Fed’s belt tightening was starting to cool the US job market, one of the primary contributors to US inflation that has forced the Fed to keep raising rates. 

On the last trading day of 2022, all major US stock indexes closed in negative territory—a fitting finale for the worst year for the stock market since 2008. BTC followed suit to register its weekly low of $16,464.

On Saturday, BTC would close out the year at $16,546, down 65% in 2022. ETH welcomed the new year priced at $1196, down 67.7% during the same period.

 

What to expect in 2023

 

It goes without saying that 2022 was a tough year for crypto investors. But there are a lot of reasons to look forward to 2023: improved macro conditions, greater institutional interest in Ethereum, stronger DeFi fundamentals and growing regulatory clarity, among others. 

Those are some of the trends our experts identified after peering into their crystal balls to predict the most relevant narratives that will play out in the crypto space during the next 365 days. You can read about all these trends and much more on our 2023 Outlook.

 

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