Market enthusiasts are optimistic about the potential good fortune the “Year of the Dragon” may bring to the crypto market, but traditional analysts urge caution.
Bitcoin (BTC) maintained a steady position, hovering around $42,000 early Monday, while the CoinDesk 20 Index (CD20) dipped 0.75% to 1,643, based on CoinDesk Indices data, as East Asian nations approach the Lunar New Year holiday.
In the upcoming days, East Asian countries will mark the beginning of the year of the dragon, often seen as one of the most auspicious and prosperous animals in the Chinese Zodiac.
Last year, CLSA, a Hong Kong-based brokerage firm, projected in a January note that 2023 would witness market fluctuations, linking a calmer outlook to the Year of the Rabbit. They advised investors to cautiously explore opportunities outside their comfort zones. The market rebounded from its lackluster 2022 performance, with bitcoin surging nearly 94% over the past year, and ether (ETH) rising by 47%, according to market data analyzed by CoinDesk Indices.
Despite Ether’s underperformance in 2023, Daniel Wang, co-founder and CEO of Taiko, a zero-knowledge roll-up platform, sees potential for Ether’s price dynamics in 2024, a year believed to be full of positive energy.
“The Year of the Dragon presents new opportunities for Ethereum, especially with the anticipated impact of ETFs,” Wang said in an interview with CoinDesk. “Ethereum is poised to achieve lower gas fees and faster transactions with the long-awaited Dencun upgrade.”
Lucy Hu, a Senior Analyst at Metalpha, suggests that bitcoin’s halving and efforts to control inflation bode well for its prices.
“Despite the current sell-the-news effect in the crypto market, the Year of the Dragon is poised to be one of the best-performing periods as inflation is now under control, and the bitcoin halving event is set to occur later this year,” she noted in a statement. “We hope the fiery spirit of the Dragon can propel the market to unprecedented heights.”
On the traditional finance front, CLSA anticipates that equity markets in the city will regain momentum in the second half of the year. However, they caution that market volatility is expected.
“Traversing this market on the dragon’s back is anything but smooth sailing,” CLSA analysts cautioned. “Roller coasters are anchored to the earth, but the dragon is not.”
CLSA also emphasized the importance of seeking professional financial advice rather than relying on astrological guidance before making investment decisions.
This information is not legal advice. Do your own research before making any decisions. Only invest what you can afford to lose and seek independent financial advice if needed. Understand the risks involved before purchasing any cryptoassets.