Since 2018 Bitcoin has started each year with a bang, adding anywhere from 7% to 36% in January. With that data in hand, some analysts are expecting big things for the crypto markets as 2022 kicks off. They point to a drop in institutional selling once the New Year begins, as well as the possibility for more capital finding its way into the crypto markets.
Economist and crypto trade Alex Kruger calls this the “first week of the year effect.”
His optimism mirrors that of Real Vision CEO Raoul Pal who also feels that strong institutional inflows at the start of the year will kick off a rebound for Bitcoin and other crypto assets. It’s been assumed that much of the December selling has come from institutional investors, and when asked about that in an interview this past Monday Pal replied:
“It looks like they’re done because the market has been chopping around for the past week, which was the traditional last week of everybody squaring their books.”
The sentiment appears valid as many of the coins being sold recently were added to wallets in May and June, just when institutional investors were loading up on crypto. And the final weeks of the year are exactly when institutions sell to harvest tax losses, or to boost their yearly returns.
If Kruger and Pal are correct then January could be the strongest month yet for Bitcoin and the broader crypto markets.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.
Source: https://www.coinbureau.com/news/historically-january-is-a-great-month-for-crypto/
