Another important catalyst for January’s rally was the short pressure on the cryptocurrency market. After the FTX debacle and the lack of bullish narratives for the niche space, most investors expected slower growth in 2023.
There are unresolved issues such as potential fallout from the Digital Currency Group, geopolitical tension between Russia and Ukraine, and recession risks due to the Fed’s aggressive quantitative tightening policies. Thus, most traders did not expect a strong price rally so early in the year.
As it turns out, negative sentiment and crowded positions in the futures market continued to fuel more bullishness. There is a strong chance of a pullback soon after sharp 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 the month of January.
The biggest gainers in the cryptocurrency market in January. Source: CoinMarketCap
Aptos (APT)
Launched in October, Aptos is a relatively new blockchain in the space that leverages the technology of Facebook/Meta’s abandoned cryptocurrency project, Libra. It carries a lot of face value based on its executive team, made up of ex-Meta engineers who also built the Move programming language to make the chain scalable and decentralized.
While the project has a great reputation, its basics don’t justify the price. Investor disbelief is part of the reason why APT prices are so high. The $3 billion market value of the four-month-old project surprised many onlookers. There is also suspected market manipulation of the APT/KRW pair on Upbit, which has resulted in a kimchi premium. It is difficult to identify a specific factor driving demand in South Korea.
APT/USD broke above its previous peak around $10, which was recorded near its launch. Technically, the token is in price discovery mode at the moment. Hence, there are a few sell-side resistance levels besides the recent high at $20 and the psychological level at $25. Unless the positive catalysts in the negative financing rate of perpetual swaps subside and the kimchi premium calms down, the rally may still have wings.
However, the symbol’s Relative Strength Index (RSI), which is a price momentum indicator, has moved into the oversold territory, indicating a possible pullback. The Moving Average Convergence Divergence (MACD) indicator shows a slight upward divergence with a less sharp rise in the gauge compared to the price. However, the presence of buying volume is reassuring for the APT bulls. The token supports are located at $14.75 and $10.40.
APT/USD daily price chart with RSI and MACD indicator. Source: TradingView
gala (gala)
Similar to Aptos, Gala
Expensive
cursors down
$0.05
They also benefited from excess negative positions in the futures market. The gain in GALA/USD from $0.02 to $0.07 can mainly be attributed to the elimination of short positions.
GALA rate (yellow) and financing rate. Source: Coinglass
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The token experienced significant inflation of about 171,232,86 gpd per day, which represents about $28.2m per month at current prices. This raises concerns that the recent price pump may be short-lived.
On January 25, the Gala team presented a new roadmap for the project in which they seek to update the tokens to reduce inflation and introduce a new burnout mechanism. They are working on a standalone Gala Chain, where GALA tokens will be used to pay transaction fees.
Moreover, the daily release of GALA may also drop after the vote is passed to change the halving schedule to a supply-based one, bringing the halving closer to July 21.
The upgrade announcements added to the buying pressure in GALA/USD, which is evident in the high buying volume. The coin is trading above its 200-day exponential moving average at $0.052. If buyers build support above this level, the price could head towards July 2022 breakdown levels near $0.164.
GALA/USD daily price chart. Source: TradingView
Threshold (T)
Threshold arose from the merger of two projects, Keep Network and NuCypher, that combined their technologies to build a decentralized bridge network. Node operators on the Threshold network share the platform’s native T token and Ether to verify transfers between Bitcoin and Ethereum. This technology is borrowed from Keep Network, while NuCypher adds a layer of privacy to the protocol.
In January, the project’s original token price nearly tripled, benefiting from the release of version 2 and Coinbase’s listing announcements. The upgraded version of the Threshold protocol will enable tBTC (Bitcoin Threshold) coins on Ethereum, which are backed by Bitcoin and pegged 1:1 to the BTC price.
The launch of tBTC on Ethereum via the Threshold Network is likely to increase the network’s Total Value Locked (TVL), making Threshold nodes even more valuable. Initially, the project will launch a semi-decentralized version
