It's not just macroeconomics that will affect crypto in the near future. The digital asset market itself is still recovering to relative normality after the collapse of crypto exchange FTX last November. Another crypto empire called Digital Currency Group is also on the verge of collapse. Here is a list of the most important factors affecting the cryptosphere in the near future.

What will happen to Bitcoin’s exchange rate?

The major cryptocurrency rose as high as $17,400 at the peak of its local rise on Monday. Here is the corresponding chart of the digital asset’s exchange rate.

Bitcoin exchange rate on a 1-hour chart scale

Bitcoin’s rise has also been accompanied by a rise in the price of the most popular altcoins, with Solana SOL showing the biggest rise among them.

Coin rates over the last 7 days

On the scale of the last couple of weeks, the growth of the market is indeed noticeable. However, investors should look at the whole chart – Venturefounder, a crypto analyst, stated this on his Twitter. Here’s his rejoinder.

Bitcoin has been trading between the $16,000 and $18,500 levels for two months now. Watch this range very closely, a break in either direction could lead to volatility, and it could happen soon. A final collapse below the line of $16K might take the price down to $13K, when you break through the resistance of $18.5K, Bitcoin will rise to $22.5K.

It should be noted that all such remarks do not mean that such forecasts are true, because they may not come true. Respectively, the expert's point of view should be taken as a possible version of events in the nearest future only.

Chart of Venturefounder

BTC is still trading around 75% below its all-time high from November 2021.

Inflation data in the USA

The Consumer Price Index (CPI), which will be published on January 12, is a key component of Fed policy because it is what determines the potential for the Fed to change its strategy in the context of an increase in the base lending rate. The CPI has been declining recently, which indicates that several rounds of rate hikes have already had a positive effect on inflation.

If the trend continues, hopes of a possible rate hike from the Fed will increase. As a reminder, an increase in the benchmark lending rate itself is causing markets to fall because it makes it more expensive to borrow new capital for investment. Accordingly, investor sentiment in such an environment does not become better.

US Federal Reserve Chairman Jerome Powell

And while potentially lower CPI data will play into the hands of crypto investors, Revere Asset Management trader and analyst Ted Zhang advises against trading at all this week. Here’s his quote.

Huge volatility is expected. I’m almost fully in the currency, opening only relatively small positions.

Expectations for an increase in the US benchmark lending rate

According to the FedWatch Tool platform, the probability of a 25 basis point rate hike this month is currently 75 per cent, compared with a 25 per cent probability of a larger 50 basis point increase. The rate has been rising by 75 basis points since mid-2022, only to be hiked by 50 points in mid-December.

Digital Currency Group’s troubles

Among the troubled cryptocurrency companies was Genesis, a subsidiary of Digital Currency Group (DCG). Shortly after the collapse of cryptocurrency exchange FTX, it halted withdrawals, leading to dissatisfaction with Gemini’s management as Genesis holds some of its assets.

Gemini founders the Winklevoss brothers approached DCG head Barry Silbert, setting him a deadline of 8 January to resolve the issue. A few hours later, however, Silbert himself posted the following appeal on Twitter.

DCG did not borrow $1.675 billion from Genesis. DCG has never missed interest payments to Genesis and is making current payments on all outstanding loans, with the next loan due in May 2023. DCG sent an offer to Genesis and your advisers on 29 December and received no response.

Digital Currency Group chief executive Barry Silbert

Meanwhile, Grayscale Bitcoin Trust (GBTC) units, also owned by DCG, are already trading around 38 per cent below the market price of Bitcoin. As a reminder, GBTC is an instrument for large investors to buy units of the trust, which should be about 1/1000th of the value of the major cryptocurrency. However, the value of the asset is now very far from normal.

GBTC units started trading at a discount to Bitcoin’s market value back in February 2021

According to an analyst nicknamed Checkmate, DCG has already turned into a time bomb. Here’s how he summarised the market situation in one tweet.

So, in the last 24 hours:
– DCG continues to collapse at a slow pace
; – The US Department of Justice is going after every cryptocurrency lender this cycle
; – Silvergate is down 50 per cent in a day
; – Huobi is in trouble.

And Bitcoin has essentially turned into Stablecoin. Waiting for a thousand dollars… am I right?

According to Cointelegraph sources, the behaviour of the crypto market in the first half of 2023 could be heavily influenced by the position of Digital Currency Group. If the company manages to stay afloat, Bitcoin will have one less fundamental reason to fall again.

Miners have stopped selling coins

The market felt a sharp pressure immediately after the FTX bankruptcy: due to the falling value of Bitcoin, miners started to get rid of their BTC holdings to compensate for the falling profitability of mining the cryptocurrency. By today, the situation has almost stabilised and miners have started to accumulate bitcoins.

Change in miners’ position

According to Glassnode, the amount of miners’ reserves has also risen to its highest level in the last month.

Dynamics of miners’ balance sheet

Quantum Economics analyst Jan Wustenfeld was optimistic about the dynamics of hash rate and mining complexity. Here’s his quote on what’s happening.

Surprisingly, hashrate has only corrected slightly in the last two months of 2022, despite miners being under a lot of pressure, and is now even rising with the 30-day moving average.

Bitcoin mining hashrate and complexity

Last week, the mining complexity adjusted downwards by about 3.6 per cent, meaning some miners did take their equipment offline. However, the next adjustment will negate those losses and tentatively add another 9 percent to the difficulty level, thus setting a new historical high.


We believe that the situation in the cryptocurrency market is mixed. On the one hand, it is too early to talk about an improvement in the global economy, as there is not even close to a key rate reduction. On the other hand, coins are performing well and Solana managed to grow twice from its bottom on December 29. Perhaps, the industry went through an attack of too strong panic the day before and is now in oversold condition. In any case, the onset of a new full-blown bull run will clearly still have to wait.