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It is not news that crypto markets have been battered all throughout 2022. We have witnessed the unfortunate implosion of FTX, failures of crypto hedge funds, and complete extortion of crypto products that had a large dependency on the first two. This year is different though. The first month of 2023 has shown us that there is indeed light at the end of the tunnel, and it may just shine brighter than ever this time.
With this in mind, we have decided to take a look at the main crypto bull market signals of 2023, and uncover traces that link institutional investors to large crypto exchanges. After all, just like a stock market, the crypto space also moves in cycles and we may just be at the start of the next bull run.
Golden cross showing us the way
One of the main signals that hint towards a bull run is the recent golden cross that is visible across all Bitcoin price charts. In short, it’s an intersection of the crypto pair’s price fluctuation averages, but let’s take a more scientific approach to this.
Golden Cross is a term used in technical analysis to describe a bullish trend reversal of a crypto asset value. It is a chart pattern formed when a short-term moving average, such as the 50-day moving average, crosses above a long-term moving average, such as the 200-day moving average. This pattern is considered bullish because it indicates that the crypto pair’s short-term momentum is shifting to the upside, which can potentially lead to higher prices in the future.
The term "Golden Cross" was likely coined because the intersection of two moving averages can resemble a cross, with the shorter-term moving average representing the shorter arm of the cross and the longer-term moving average representing the longer arm. When the shorter arm crosses above the long arm, it creates a bullish signal that is often interpreted as a buy signal by traders.
Crypto traders and investors use the Golden Cross as one of many technical indicators to help them make informed market trading decisions. It is important to note, however, that technical analysis should not be used in isolation and should always be combined with other forms of analysis.
Despite these limitations, the Golden Cross remains a popular and widely used technical indicator, and it continues to be a popular topic of discussion among traders and investors. Whether you are a seasoned crypto trader or a new investor, understanding the Golden Cross and how it is used in technical analysis can help you make more informed investment decisions.
How to find the Golden Cross
Strictly speaking, all crypto exchanges show you crypto price graphs but not all provide the tools for in-depth valuation and trends research. A top crypto exchange like Gate.io boasts a plethora of tools that go beyond simple candle price graphs. These platforms are equipped with all the necessary charting addons and this is how successful crypto traders do their research. Of course, they also rely on market sentiment reading, news, and much more, but it will be foolish to say that Golden Cross is a signal not strong enough.
Cryptomarket cycles and bull markets
Cryptocurrency bull markets refer to periods of an upward trend in the price of digital assets, such as Bitcoin, Ethereum, and others. During a bull market, the demand for cryptocurrencies is high, leading to an increase in prices and widespread optimism among both institutional and retail investors. This type of market is in stark contrast to bear markets, which are characterized by declining prices and investor pessimism.
Bull markets in cryptocurrencies can be driven by a variety of factors, including increased adoption, regulatory clarity, and technological advancements. For example, when large institutional investors and corporations start to invest through a crypto exchange as Gate.io, it can drive up demand and contribute to a bull market. Similarly, when governments provide clear regulatory frameworks for the use of cryptocurrencies, it can increase investor confidence and lead to a bull market.
One of the most well-known bull markets in cryptocurrency occurred in late 2017, when the price of Bitcoin skyrocketed from around $5,000 to nearly $20,000. This bull market was driven by a combination of factors, including increased institutional investment, regulatory clarity, and media attention.
Institutional investors’ share of the game
Institutional investment in crypto has been a significant driver of the recent bull markets in the space. In the past, crypto was often seen as a niche asset class, primarily favored by individual retail investors and early adopters. However, in recent years, there has been a growing trend of institutional investors entering the market, which has provided increased credibility and stability to the sector.
Today, it is fair to say that most financial institutions are already heavily invested in crypto. The behemoths like Blackrock, and Goldman Sachs and hedge funds like Galaxy Digital and a16z, openly trade and hold crypto, and even finance blockchain-based products.
Institutional investment can take many forms, including direct investments in crypto, investments in cryptocurrency-focused funds, and investments in companies that are developing blockchain and cryptocurrency technology. The entry of institutional investors into the market has brought increased liquidity, improved market infrastructure, and a more professional approach to investing in cryptocurrencies.
Furthermore, the institutionalization of the cryptocurrency market has been a key factor in its growth and development, and it is expected to continue to drive the market forward in the future. The involvement of large institutional investors has helped to increase the visibility of cryptocurrencies and has provided a much-needed boost of confidence in the space.
With the growth of crypto market capitalization, crypto exchanges have also become fully-fledged institutions in their own right. An established crypto exchange processes over $ 2 billion worth of crypto volume per day and caters to the needs of both institutional and retail investors.
In addition, the trend of institutional investment in cryptocurrency has also been driven by the growing recognition of crypto as a valuable and legitimate asset class. With the rise of decentralized finance (DeFi) and non-fungible tokens (NFTs), the potential use cases for cryptocurrency are expanding, which has further increased their appeal.
Final words
One of the underlying signals of the crypto markets’ change into a bull trend, is the volume, traded on top crypto exchanges. From December 2022 to the end of January 2023, this gauge grew by 100%, and according to the Golden Cross, there are no signs of it halting any time soon.
Of course, this trend can be affected by a long list of factors and there is no way of knowing whether this bull market is sustainable. One thing we are certain of is that institutional investors hardly ever make critical trading mistakes (apart from the events of 2008), and they may just be buying up the crypto you are currently selling.
