Bitcoin and most major altcoins are attempting a recovery from their strong support levels, indicating that traders continue to buy on dips.
Alex Kruger, an economist and crypto trader, predicts that cryptocurrencies will resurface at the start of next year.
Kruger tells his Twitter followers that Bitcoin (BTC) has had a “first-week-of-the-year-effect” for the past four years, with the price rising by 7% to 36%.
Crypto Market to Surge 30% to 50% in 2022
Cryptocurrencies will increase in early January, according to the economist and crypto trader, before sentiment turns sour ahead of a Federal Open Market Committee (FOMC) meeting to determine US monetary policy.
When asked about his predictions for the coming year, Kruger predicted that the overall crypto-asset sector would rise by at least 30% and as much as 50% by 2022.
He adds that both the bulls and bears will be disappointed. Following an increase in inflation, the Federal Reserve announced in mid-December that there will be at least three interest rate hikes in 2022.
Kruger recently stated that increased interest rates will benefit traders over investors.
He says hiking is not equal to the bear market, it instead is equal to a headwind(ceteris paribus shallower slope), and increased volatility. This requires greater cash holdings and more aggressive profit-taking, i.e. a traders’ market rather than a holders’ market. Not for those who believe in doomsday, he adds.