What pushed the crypto price chart upwards in the first half of 2023?

Bob Steveson
July 19, 2023

One of the big question marks about crypto these days is inwhich direction it is heading this year. At Voltcoins we encourage people tomake informed decisions when it comes to purchasing digital assets, and that’swhy we want to take a look at what has happened so far in 2023.

As always, a major price development can’t be attributed toa single event and more often than not, a confluence of factors is behind thedynamics as a whole. If you want to know more, you are invited to read thispost. We’ll try to make things as clear as possible.

Oversold market

2023 began very bleak for the crypto price chart. The marketfaced a brutal bearish sentiment that led to a drop in value of over 90% formany cryptos, especially leading ones.

2020 and 2021 saw an increased appetite for buying cryptoand that pushed prices to new all-time highs. However, just like we rememberfrom prior cycles, the momentum ran out of steam around November 2021, and fromthere followed a vicious move lower.

The crypto price chart showed oversold conditions aftermarket participants were forced to de-risk. Experts agree that this is exactlywhen a bounce is very likely to happen, since the selling momentum always runsout of air at some point. On the contrary, when valuations are very cheap, itis the best time to start reconsidering deploying some capital back into thecryptocurrency space.

Bullish developments on the cryptoprice chart

Digital assets are still considered highly speculativeinstruments, which is why momentum and market sentiment play a leading role inthe price direction. There are many ways to analyze these variables, but themost convenient one is by looking at the crypto price chart and trying todetermine what side of the market is in control.

During the first half of the year, we’ve witnessed higherlows and higher highs occurring in popular cryptocurrencies, including Bitcoin,Ether and others. That suggests that market participants were willing topurchase coins at higher and higher levels, creating a bullish environment.

Higher risk appetite

Monetary policy tightening in 2022, combined with smallerfiscal spending globally, were considered negative factors for the economy. Asa result, 2023 started with pessimistic expectations globally. However, theseexpectations did not materialize. We at Voltcoins closely monitor therelationship between decisions made by the authorities and the crypto market.

All in all, economic activity remained stable, although itcooled off a bit. In the absence of a major risk event to price into themarket, crypto markets saw a window of opportunity and capital poured back intothe industry.

Bottom line

Cryptocurrencies managed to outperform this year because nonews is generally good news for asset prices. The crypto price chart increasinglyshows a higher appetite to buy and that acts as a self-reinforcing pattern.Many new people became interested and joined the trend, afraid to miss out on alarge move. Fears related to tight crypto regulation and an economic downturnended up being exaggerated.

read more