On the 4th of January 2023, Dylan LeClair, a senior analyst at UTXO Management, went on Twitter to share the rally of some cryptocurrencies and crypto mining stocks.
— Dylan LeClair 🟠 (@DylanLeClair_) January 4, 2023
According to his tweet, assets like $MARA rose approximately 23.8%, $SI 22.9%, $RIOT 14.8%, $COIN 12.4%, and $MSTR 9.63%.
On some levels, the announcement incited hope that the crypto winter might be coming to an end. Yet, it’s difficult to differentiate between an artificially induced rally and a genuine recovery of the market. While some users shared feelings of concern since they are yet to identify a cause-and-effect pattern in the price rise. In response to the tweet, some users believe that the price rise could be short sellers exiting their positions with buy orders.
The exit of these short sellers would cause prices to rise higher. This rapid price rise would attract buyers to the asset. The combination of new buyers and panicked short sellers creates a rapid rise in price. Though it is all speculation, this is still a welcome development when compared to the affairs of the previous year.
The year 2022 was really rough for users and investors in the crypto space. With the heavy crypto winter, more than $1.2 trillion was swiped off the market, and the price of Bitcoin, the world’s largest digital coin, fell more than 60%.
To make things worse, the winter was amplified by a succession of collapsed centralized crypto establishments from LUNA to the second-largest CEX, FTX. Inflation kicked in, and Bitcoin’s reward-halving design didn’t help either. So anybody who made predictions in 2021 was so off the mark they were sorely mistaken.
But the year is 2023, and alot of crypto users are still bullish about the industry, sticking their necks out with calls for prices that would still lead to a volatile year.
Currently, Interest rates are rising around the world, and that’s bound to affect such risky assets like Bitcoin and heavily shorted crypto assets. Users and investors are also watching how the FTX drama, which resulted in the arrest of Sam Bankman-Fried in the Bahamas, will develop.
Utilizing Wyckoff’s analysis and the Composite man principle, it doesn’t really matter if the market movement is real or artificially induced. Still, if the price of BTC doesn’t make a massive comeback, the crypto industry might not bounce back.