The year 2022 can be called one of the scary and declining years of the digital currency market, which will definitely be remembered by all of us; But probably we would like to prevent it from happening again. The destruction of small and large projects, the regulation of exchanges and more than 9 big hacks are some of the most impressive memories that were remembered from 2022. Well, the main question that may be on our minds is what will happen in 2023? Will the digital currency market have an upward trend? Will it be a good time to invest? As an Iranian (despite the embargo on foreign services and legal issues), what chance will we have to profit from the market? In this article, I have analyzed these issues, which I hope will provide good clues for the way forward.
This article contains analysis and personal opinions of Sanaz Vafi, an analyst and researcher in the field of blockchain and cryptocurrencies. The points mentioned in this article should not be considered as investment advice. Keep in mind that it is wrong to rely on analysts to trade in the cryptocurrency market and you should always do your own thorough research.
A look at Bitcoin and its price trend
It has been 2 years and 8 months since the last bitcoin halving (May 11, 2020 equal to May 22, 2019) and as expected, bitcoin showed a similar behavior (my analysis of bitcoin and crypto market cycles) compared to the previous three cycles. From the sixth month to a year later, we saw an upward trend in the price, which led to a bull run and subsequently an increase in the volume of the altcoins market (alt season). After a year of rising and declining dominance of Bitcoin, we entered a bear market with a slow slope and witnessed the outflow of liquidity from the crypto market. If we expect this behavior to continue until the next halving (March 2024 equal to March 1402), the downward trend in the price will continue at least 3 months before the next halving (November 1402).
According to the same formula, which is based on the 4-year cycle of Bitcoin and the market, we can have a closer look at the price channels:
- The highest price of Bitcoin in this cycle was recorded at $68,000. So we will see this price breaking before March 1402.
- It is estimated that the lowest price of Bitcoin until the next Bolran will be between 12 and 14 thousand dollars. (According to some successful analysis, this price is a bit far-fetched and the $18-$20,000 channel could be the lowest price of this cycle)
According to the point of time we are now, it can be said that the entry of capital (for the long term) in the price ranges of 15 to 20 thousand dollars, can be the closest and most logical decision in the winter of 1401.
A look at Ethereum and its updates
As I have always emphasized this issue in these years, Ethereum is considered one of the most important networks in the blockchain and crypto world, whose updates and changes affect the entire market. Altcoins, the DeFi industry, gaming, and NFTs are all and will be overshadowed by Ethereum’s infrastructure. So, one of the important fundamental issues that we should always be aware of is the development of Ethereum and its competitors.
According to the long-term roadmap that Ethereum published in 2017, Ethereum called 2020 the entry into Ethereum 2, and the transition phase from Ethereum POW to Ethereum POS started and continues in the last month of the same year. In September 2022 (September 1401), one of the most important updates of the blockchain world, titled “Merge Ethereum”, was successfully completed and China’s Beacon chain was merged with Ethereum 1.
About 4 months have passed since this update, we haven’t seen many changes in the ecosystem and the ETH price, which are the main reasons for me:
- This update took place in one of the most bearish situations of the market (in the cycle we are in).
- The fever of the NFT and DeFi markets had decreased drastically.
- Due to the complexity and weight of this update, many activists in the field who specialize in infrastructure sectors are still studying and investigating the new Ethereum and its potential.
- As I have already discussed in detail about Ethereum 2, this change will have long-term effects and will obviously not have a short-term effect on the price of ETH.
Be careful, ETH coin with a dominance of about 20% is the second most influential coin in the market, whose price growth has a great impact on altcoins. On the other hand, many of Ethereum’s competitors such as Tron and Solana, who were able to compete closely with Ethereum for some time, did not perform well in the crypto winter, and the supporters of these networks abandoned them in the bear market. This happened to Ethereum too; But due to many reasons, including the age of the ecosystem, strong cash flow, project whales, development-oriented and somewhat decentralized system, it did not have a significant negative effect on the ETH price trend. Therefore, it can be analyzed that the Ethereum network (as a case study) and the ETH coin (as a long-term investment) can be one of the options on the table.
The status of Tether in Iran and its use as a dollar
Tether, the most popular stablecoin in Iran (which I have talked about its use and its dangers many times in videos), has become the favorite of many Iranian people who are not familiar with digital currencies, due to the recent developments in Iran. The main reasons for using Tether for people can be the ease of buying and selling, the ability to move large volumes, the ability to transfer abroad, etc. But in addition to these features, using this stablecoin instead of dollars has many risks, the main of which are:
- Iran being on the sanctions list of the Tether support company, the lack of transparency of the Tether buying and selling law in Iran, the ability to freeze USDT inside non-custodial wallets.
According to these cases, what is the solution? I suggest that if you are using Tether as a “capital preservation against inflation”, you should use other alternatives like DAI, which does not have at least two of the risks I mentioned above. But if you are a trader and are familiar with the crypto market, you can use BUSD in addition to DAI (which has less market diversity).
Good opportunities and projects to study and invest
Before introducing the projects that I think are good opportunities for study and investment, I need to mention that according to the 4-year market cycle, we are in the last year of a downward trend, and in general, this period can be a good time to enter capital into this market. But on the other hand, last year’s legal events (legislators’ strictures on foreign exchanges and non-service to Iranians) have made it difficult to use the market’s potential. So I suggest that if you do not consider yourself an expert in the market, you should definitely benefit from the advice of experts in this field before making a final decision.
But good investment opportunities:
- Ethereum project (in the Ethereum section, I explained that the effects of the Marj update have not shown themselves yet, and it can show its effect well in the next Bolran)
- Projects that are active in the field of artificial intelligence, machine learning and big data are likely to be among the main trends of the next Bullran (SingularityNET – Ocean Protocol – Fetch.ai – SingularityDAO projects).
- COSMOS project (strong community, good updates in the infrastructure and version 2, and the aging of the project in the next Bolran)
- Project ALGORAND (strong community, loyal holders and extreme price gap compared to ATH)
- AAVE project (very strong technical team, one of the pioneers in the field of DeFi, many DeFi projects depend on this project)
- Among all the competitors of Ethereum, maybe the only hope is Cardano, which I still believe has many disadvantages that plague this network; But the efforts and pursuits of the team (especially its founder Charles Hoskinson) can be a good way forward for 2023 and 2024.
Some very important points that we should be aware of!
- Be very careful when using Tether (whether dollar investment or crypto trading). If you don’t follow the field news daily, be sure to follow USDT legal news daily to protect your assets if something strange happens.
- 2023 is a year to recover and prepare for the next bull run; So we will see a lot of legal cleanups by the end of the first 6 months, and we probably won’t hear about big hacks and scams.
- The SEC will exert maximum pressure. Be careful, Mr. Gary Gensler is in charge of the SEC in the Biden cabinet until the end of 2026, and until today he has put a lot of emphasis on token security legislation!
- 2023 will be the year of Difai’s resurgence. With updates and upgrades in user interfaces, transparency in liquidity pools, becoming more practical and finally using the frozen assets of project owners, we can say that good things will happen to the DeFi industry and projects in this field. So it can be concluded that the use of centralized services will decrease. (This point is very important for investing in tokens and coins of these services)
- After last year’s bankruptcy, fraud and major hacks, the stock and brand value of many crypto companies such as FTX and Coinbase decreased significantly. Based on my experience of the market over the past several years, I expect Wall Street firms and big banks to start buying crypto companies and this will change a lot of equations in 2024.
Answers to your questions
- Question: In one of your live broadcasts a few months ago, you said that we will see the lowest prices in November and December 2022. Do you still believe in that or have conditions changed?
- Answer: The theory and formula of my answer is still the same, and I believe that the main floor constructions were done in these months. But I explained above that we still have good investment opportunities in 2023.
- Question: Is it possible that Tether will go down in a few days??? I want to buy some.
- Answer: We all know that we have to consider many non-crypto factors to analyze Tether/Tomen, so I cannot give a technical and precise opinion. But considering the hyperinflation in the country, the possibility of price reduction is very low.
- Question: Since I am wounded by ftx, please introduce me to a few dexes that have relatively good security to connect the wallet, so that I can put a limit order on them for a few days.
- Answer: UNISWAP to work with Ethereum and PANCAKESWAP for Binance Smart China. Read this link to learn about bridges.
the final conclusion
I hope the things mentioned can give a good outlook for the next few months and help both in terms of investment and case studies. I and all my colleagues in Blockchain Homeland are always looking for awareness and we promise to come back to you with live and educational videos as usual when the conditions of the country improve. Let’s not forget that the crypto market was turbulent and very risky; So don’t get involved in emotions and act intelligently in it.