The rally in cryptocurrency markets started in early January with a spike in heavily-shorted altcoins and Ethereum (ETH) liquid staking derivative (LSD) tokens due to the upcoming network upgrade in March. Soon gains started to show across the board as buyers started to play catch up.
The improving macroeconomic conditions, such as reduced inflation and a stable job sector in the United States, provided additional tailwinds for the positive rally. Bitcoin (BTC) is en route to its most impressive closing for January since 2013. Its price has gained 40% year-to-date from the opening value of $16,530.
Another important catalyst for January 2023’s rally was a short squeeze across the crypto market. After the FTX debacle and the lack of bullish narratives for the niche space, most investors expected growth to slow down in 2023.
There are unresolved issues such as potential a Digital Currency Group fallout, geopolitical tension between Russia and Ukraine, and recession risks due to Fed’s aggressive quantitative tightening policies. Thus, most traders didn’t expect strong price rallies so early into the year.
As it turns out, negative sentiment and crowded positions in the futures market continued to fuel more upside. There’s a strong chance of a pullback soon after steep gains. It remains to be seen if the pullback levels are attractive enough for buyers to turn it into a medium-to-long-term bullish trend. Let’s take a look at the top performing cryptocurrencies for January.
Aptos (APT)
Launched in October 2022, Aptos is a relatively new blockchain in the space which leverages the technology of Facebook’s (Meta) discarded project, Libra. It carries significant face value based on its executive team, composed of former Meta engineers, who also built the Move programming language to make the chain scalable and decentralized.
While the project carries much reputation, its fundamentals do not justify the price. The disbelief among investors is part of the reason behind the APT price rally. A market capitalization of $3 billion for a four-month-old project has surprised many onlookers. There’s also suspected market manipulation in the APT/KRW pair on Upbit, giving rise to the Kimchi premium. It is difficult to pinpoint a specific factor driving its demand in South Korea.
APT/USD broke above its previous peak of around $10, recorded around its launch. Technically, the token is in price discovery mode right now. Thus, there are few sell-side resistance levels besides the latest peak of $20 and the psychological level at $25. Unless the positive catalysts in the negative funding rate for perpetual swaps and the Kimchi premium cool off, the rally may still have wings.
The price momentum indicator, Relative Strength Index (RSI), has spiked to oversold territory, suggesting the possibility of a pullback. The Moving Average Convergence Divergence (MACD) indicator shows a slight bullish deviation with a less steep rise in the metric compared to the price. Still, the presence of buying volume is reassuring for APT bulls. The support for the token lies at $14.75 and $10.40.
Gala (GALA)
Similar to Aptos, Gala (GALA) also benefited from the excess negative positioning in the futures market. The gain in GALA/USD from $0.02 to $0.07 can be primarily attributed to wipe out of short positions.
The token suffered significant inflation of around 17,123,286 GALA daily, which accounts for around $28.2 million monthly at current prices. It raised concerns that the recent price pump could be short-lived.
On Jan. 25, Gala’s team introduced a new roadmap of the project in which they seek to update the tokenomics to reduce inflation and introduce a new burn mechanism. They are working on an independent Gala chain, where GALA tokens will be used to pay transaction fees.
On top of that, the daily issuance of GALA may also reduce after a vote is passed to change the time-based halving schedule to a supply-based one to bring halving closer than July 203.
The upgrade announcements have added to the buying pressure in GALA/USD, evident in a spike in buying volume. The token is trading above its 200-day exponential moving average at $0.052. If buyers build support above this level, the price can run toward the July 2022 breakdown levels near $0.164.
Threshold (T)
Threshold was born from the merger of two projects, Keep Network and NuCypher, which have combined their technologies to build a decentralized bridge network. Node operators on the Threshold network stake the platform’s native token, T and Ether, to validate the transfers between Bitcoin and Ethereum. This technology was borrowed from Keep Network, while NuCypher adds a layer of privacy to the protocol.
In January, the project’s native token nearly…
cointelegraph.com