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SirWin
SirWin
SirWin

Analyst shares strategies to revive crypto portfolio in 2023

analyst-shares-strategies-to-revive-crypto-portfolio-in-2023
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Opinion
Analyst shares strategies to revive crypto portfolio in 2023

The crypto market is bracing against the effects of the 2022 bear market. However, 2023 seems to be better. Adrian Zdunczyk, founder of Birb Nest and a chartered market technician, has spoken about the matter at the Blockchain Economic Conference London and given strategies to recover in the crypto market this year.

What 2023 has for crypto markets

Will the crypto markets fully recover this year? According to Zdunczyk, the answer is no. The losses are inevitable, and profits are hard to create. He said traders must deal with the winds of uncertainty and the guaranteed losers. He added that such is the nature of the market, and traders have to accept and deal with it.

However, it’s great that there are market analysis tools to help curtail the risks involved in trading and increase the chances of winning. Still, Zdunczyk explained that technical analysis does not guarantee profits as it is not protected from market manipulation and keeps changing continuously.

Additionally, he explained that trading analysis helps identify different patterns that might influence price movements and directions, like politics. He added that these trends also help determine more significant market moves, like bearish or bullish trends.

Looking at the market conditions in 2023, Zdunczyk said that people need to relate it to 2022 because things were not good back then. According to him, we are at risk of recession with different crucial sectors, as the energy sector has been suffering from spiking costs over the past few months. However, the signs of high prices are receding, showing that the markets might recover. Also, the crypto market is in a good place as BTC floats above the $20,000 zone. This puts 2023 in a better position than 2022.

The analyst thinks we are looking at what seems like the fifth bull market’s start. The crypto space is recovering, starting with a gentle touch. Historically, pre-election years following a burning market are the strongest years. As seen throughout over 84 years, the pre-election year was poor only once. 2023 precedes a 2024 election year for the US, which is a good signal.

Zdunczyk also dived into the January battle meter, which states that as January goes, so goes the year. It has an 83.3% accuracy ratio over 72 years. He explained that this year started well and will probably translate to the rest of the years.

Strategies to watch out for

Strategy 1. Count with bitcoin halving

Bitcoin halving process is scheduled sometime in 2024. It will be a period where the network’s mining hash rate will rise, often triggering an upward movement of the bitcoin price. 

As the most significant cryptocurrency, bitcoin has been seen pushing other coins to start bull rallies. This is called the altcoins season. As such, investors should not ignore the bitcoin halving process going forward, as the year before the halving process is seen to have a notable price rally.

Strategy 2: Watch critical levels: support and resistance 

According to Zdunczyk, the market needs to drive specific price percentages in one direction to break critical levels and be backed by volume. However, it’s not always required in some instances, like margin markets.

Luckily this year, the volume, volatility and time have already backed each other, showing that the trend has shifted from a bear run towards a bullish cycle. However, it’s not 100% guaranteed to maintain the momentum.

Strategy 3: Rely on relative strength and relative momentum

The other winning strategy, backed by 212 years of historical records and the best-preserved historical record of investing, relies on relative strength.

It says that outperforming assets will continue to outperform, and down-performing assets will continue to perform down. It assumes that behavioural biases often drive the existence of this internal impetus by the way investors react.

The bias is often reflected in the price as it shows people react to the market movements driving prices way higher or lower than any chart readings out of fear. Zdunczyk explained that if you encounter such a case, do not oppose those market forces.  

Strategy 4. Search for the outliers

Zdunczyk further revealed that learning the market breaths. About 60% of the coins are trading above their 200-day moving averages. That means only 40% of the coins are still in the bear cycle. This rise is significant from the 5% of the coins above the 200-day MA at the start of the year.

He also noted that today’s crypto leaders are becoming defined as gaming, Defi, NFTs and metaverse ecosystems. He explained that such trends might change this year’s crypto market outlook on leaders. So, in conclusion, the basics behind winning strategies for the year are following the patterns and not opposing the many years of data records.

Who is Adrian Zdunczyk

Adrian is a remarkable market technician with a good history of dealing with the crypto market. His views, opinions, and strategies are invaluable, but it’s advisable to DYOR

As he said at the conference, nothing is guaranteed, and the market can change at any time, so take the lessons and do not consider this financial advice.