The January Effect and New Capital: Why Bitcoin (BTC) and other Cryptos Are in the Green

[PRIBO247]

Many crypto enthusiast and traders were aware that there might
be massive volatility as we headed into the Holiday Season of
2018. Many had expected a Santa Claus rally or a false breakout
as many traders were cashing out to spend time with family. By
December 24th, Bitcoin (BTC) was trading at $4,200 and up
$1,000 since its recent low of $3,200 on the 15th of December.
However, the excitement before Christmas got exhausted a few
hours later with the King of Crypto dropping to $3,600 by the
28th of December: a drop of 14.2% from the earlier mentioned
$4,200.

All Green Today, the 2nd of January
As we entered the New Year, Bitcoin was trading at $3,700. The
same BTC is now valued at $3,900 and up 4.70% in the last 24
hours. Further looking at the top 10 cryptocurrencies according
to Coinmarketcap.com , we find that Ethereum (ETH) has
reclaimed the number 2 spot from XRP as the Constantinople
hard fork approaches. The upgrades on the Ethereum network
are meant to be initiated on the 16th of January, thus providing
ETH with the necessary momentum to gain considerably in the
past few days.

The January Effect Explanation
In traditional stock markets, the January effect is defined as…

[A] seasonal increase in stock prices during the month of
January. Analysts generally attribute this rally to an increase
in buying, which follows the drop in price that typically
happens in December when investors, engaging in tax-loss
harvesting to offset realized capital gains, prompt a sell-off.
Another possible explanation is that investors use year-end
cash bonuses to purchase investments the following month.
Given the entry of crypto investing by Wall Street institutions
such as Hedge Funds and regular crypto exchanges wooing
institutional investors, it is safe to assume that the January
effect could have crossed over to the crypto markets.

New Capital Might Have Also Found its Way Into Crypto
This then brings us to the second reason why the markets are in
the green. The just concluded year of 2018 saw many major
cryptocurrencies decline by 80% to 93% from their All Time High
(ATH) values. These digital assets are still currently massively
discounted when using ATHs as reference points. Such
discounts are not easily missed by Hedge Fund managers who
would be quick to transfer funds from banks – as soon as they
reopened today, January 2nd – to start their crypto investment
strategies for 2019.

Conclusion
Summing it up, January 2nd has provided a pleasant day in the
crypto markets as many of the digital assets have experienced
considerable gains in the last 24 hours. This then brings us to
observe that such a ‘rally’ could be as a result of The January
Effect in the crypto markets. Also to note, is that many digital
assets are massively discounted when compared to their All
Time High values of late 2017 and early 2018. As a result, new
capital could have entered the crypto markets from Hedge Funds
wishing to capitalize on these opportunities.

https://ethereumworldnews.com/