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Futures and options let traders put down only a tiny portion of a trade’s value and bet that prices will go up or down to a certain point within a certain period. It can make traders' profits bigger because they can borrow more money to add to their positions, but it can also boost their losses much if the market moves against them.

Even though the market for crypto derivatives is growing, the instruments and infrastructure that support it are not as developed as those in traditional financial markets.

Next year will be the year that crypto derivatives reach a new level of growth and market maturity because the infrastructure has been built and improved this ye, and an increasing number of institutions are getting involved.

Crypto derivatives' growth in 2023

In 2023, the volume of crypto derivatives will continue to grow because of two factors: first, the growth of relevant infrastructure such as applications for decentralized finance (DeFi) and also because of more professional and transparent intermediaries planning to enter the space. Eventually, this will lead to more institutions getting involved.

Understanding why traditional financial institutions use derivatives more than traditional spot markets is an excellent way to learn more about the market.

Bitcoin (BTC) kept traders guessing to the last minute into the 2022 yearly close as volatility remained absent from the market.

BTC price: Where's the volatility?

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD clinging to a familiar area around $16,500.

The pair continued to disappoint players on both sides of the trade after a sideways Christmas, ignoring the potential significance of the simultaneous weekly, monthly, quarterly and yearly candle close.

“Technical resistance and overhead liquidity suggests sub $17k local top, but anything goes in the Wild Wild West,” on-chain analytics resource Material Indicators wrote in part of commentary on the Binance BTC/USD order book.

An accompanying chart nonetheless showed a lack of significant support above $16,000, with resistance overhead at $17,000.

Bitcoin (BTC) and crypto will need until at least 2024 to "recover from the abuse of unscrupulous players," says one of the industry's best-known names.

In a blog post released on Dec. 30, David Marcus, CEO and founder of Bitcoin firm Lightspark, disappointed bulls with his outlook for the coming years.

Marcus: "Crypto winter" will likely last until 2025

Less than two months after the FTX meltdown, the repercussions continue to unsettle sentiment and price performance alike.

For Marcus, famous for his crypto role at Meta and before that PayPal, bad actors have a lot to answer for, and their specter will remain with the crypto industry beyond 2023.

While mentioning FTX only once, he referenced what he called "unscrupulous players" dragging out market underperformance even beyond next year.

Bitcoin (BTC) teased more volatility at the Dec. 30 Wall Street open with BTC/USD heading ever closer to $16,000.

Will new year deliver "long-awaited volatility?"

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD wicking down to lows of $16,337 on Bitstamp.

The pair had been gradually upping the volatility in the days after Christmas, as analysts eyed the likelihood of a final burst of action before the yearly close.

“Last trading day of the year for TradFi, but crypto will trade through the holiday weekend. Perhaps we may see some of that long awaited BTC volatility around the Weekly/Monthly close and the start of 2023,” on-chain analysis resource Material Indicators ventured.

Popular trader and analyst Rekt Capital noted that “historically, a strong indicator of where the $BTC bottom is is when the bearish BTC Candle 2 performs its Yearly Close."

December will likely be remembered by Bitcoin's (BTC) fake breakout above $18,000, but apart from that brief overshoot, its trajectory was entirely bearish. In fact, the downward trend that currently offers an $18,850 resistance could bring the BTC price below $16,000 by mid-January.

A handful of reasons can explain the negative movement, including the reported withdrawal of Mazars Group auditing firm from the cryptocurrency sector on Dec. 16. The company previously handled proof-of-reserve audit services for Binance, KuCoin and Crypto.com.

Additionally, one can point to the bankruptcy of one of the largest cryptocurrency miners in the United States, Core Scientific. The publicly listed company filed for Chapter 11 bankruptcy on Dec. 21 due to rising energy costs, increasing competition, and the Bitcoin price crash in 2022.

The liquidity crisis at the crypto lender and trading desk Genesis Global and its parent company, Digital Currency Group (DCG), sparked fear among investors. More importantly, DCG manages the $10.5 billion Grayscale Bitcoin Investment Trust (GBTC). The fund is currently trading at a 47% discount to its net asset value in part due to investor speculation on its exposure to Genesis Global.

Negative pressure from the U.S. Federal Reserve tightening movement

Apart from the bearish newsflow, the macroeconomic scenario deteriorated after the U.S. Federal Reserve hiked interest rates by 50 bps on Dec. 14. Analysts, including Jim Bianco, head of institutional research firm Bianco Research, said that the monetary authority would maintain its tighter monetary policy in 2023.

Bitcoin (BTC) may not be good value enough for a macro price bottom, according to analysis from CryptoQuant.

In a blog post on Dec. 29, a contributor to the on-chain analytics platform flagged one BTC price indicator with further to fall.

Profitability indicator lacks key cross

At nearly 80% below all-time highs, BTC/USD is nearing the zone in which it bottomed during previous bear markets.

As CryptoQuant's MAC_D notes, there is no shortage of instruments pointing to the 2022 bear market bottom already forming.

Despite this, however, the signs are not yet unanimous, and pointing to transactions in profit and loss, he warns that cheaper BTC prices may still enter.

Bitcoin (BTC) is approaching the end of 2022 at levels not seen in over two years — what do traders think will happen next?

BTC price reeling from USD strength

Currently down 15% in Q4 and over 60% year-to-date, BTC/USD has few bullish allies as 2023 looms.

Struggling to recover from the ongoing FTX scandal and associated fallout, the largest cryptocurrency giving back all the gains seen since late 2020 is indicative of the crypto market as a whole.

Risk assets are in a precious position themselves, as Cointelegraph reported, while eyes are also on the strength of the U.S. dollar going into the new year.

Cointelegraph takes a look at the diverging opinions among some popular traders when it comes to what BTC price action could do in Q1, 2023.

Ether (ETH) has been ranging near $1,200 since Dec. 17, but an ascending trend has been quietly gaining strength after 50 consecutive days.

The pattern points to $1,330 or higher by March 2023, making it essential for bulls to defend the current $1,180 support.

The anxiously awaited migration to a Proof of Stake in September 2022 paved the way for additional layer-2 integration and lower transaction costs overall. Layer-2 technologies such as Optimistic Rollups have the potential to improve Ethereum scalability by 100x and provide off-chain network storage.

Developers anticipate that the network upgrades scheduled for 2023 introducing large portable data bundles can boost the capacity of rollups by up to 100x. Moreover, in December 2021, Vitalik Buterin shared that the end game was for Ethereum to act as a base layer, with users "storing their assets in a ZK-rollup (zero knowledge) running a full Ethereum Virtual Machine."

An unexpected move negatively affecting the competing smart chain platform Solana (SOL) has likely helped to fuel Ethereum investors' expectations.

Solana (SOL), the cryptocurrency once supported by Sam Bankman-Fried, pared some losses on Dec. 30, a day after falling to its lowest level since February 2021.

Solana price down 97% from November 2021 peak 

On the daily chart, SOL's price rebounded to around $10.25, up over 20% from its previous day's low of approximately $8. 

Nevertheless, the intraday recovery did little to offset the overall bear trend — down 97% from its record peak of $267.50 in November 2021, and down over 20% in the past week. 

But while the year has been brutal for markets, Solana now joins the ranks of the worst-performing tokens of 2022, namely FTX Token and LUNA, which are down around 98%. 

SOL price could recover 50%

However, the latest Solana price rebound hints at the possibility of more upside heading into 2023.

Bitcoin (BTC) staged a modest recovery on Dec. 29 as United States stock markets rebounded in step.

$10,000 BTC price targets stick

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD recovering above $16,600 at the Wall Street open after wicking below the $16,500 for a second day.

The pair remained unappealing to traders, many of whom feared a deeper retracement may still occur around the new year.

In a list of potential “capitulation targets,” Crypto Tony doubled down on $10,000 and lower for Bitcoin, while also revealing expectations for Ether (ETH) to dip as low as $300.

“Things change quick, but if we hit these areas I begin to ladder,” part of accompanying commentary read.

Bitcoin (BTC) is due to copy gold’s explosive 1970s breakout as it becomes the world’s “hardest asset” in 2024.

That was one forecasted from the latest edition of the Capriole Newsletter, a financial circular from research and trading firm Capriole Investments.

Bitcoin due big moves “and more” in 2020s

Despite BTC price action flagging at nearly 80% below its latest all-time high, not everyone is bearish about even its mid-term outlook.

While calls for a further drop before BTC/USD finds its new macro bottom remain, Capriole believes that 2023 will be bright for Bitcoin as a revserve asset.

The reason, it says, lies in the world economy’s financial history of the past century, and in particular, the United States after the dollar deanchored from gold completely in 1971.

Bitcoin (BTC) is not about to bottom at just below $17,000, warns a new analysis as bid liquidity dries up.

In social media posts after Christmas, on-chain analytics resource Material Indicators flagged waning interest in protecting the current BTC price range.

Binance order book leaves “not much to be excited about”

With volatility still largely absent from Bitcoin markets, analysts are keenly eyeing what could happen at this week’s yearly close.

The closing price for BTC/USD on Dec. 31 will also mark the conclusion of the weekly and quarterly candles, and any flash volatility could turn 2022 into a nightmarish bear market year.

As Cointelegraph reported, the pair is currently down around 60% year-to-date, while it has lost 76% versus its latest all-time high from November 2021.

Bitcoin (BTC) circled $16,750 after the Dec. 28 Wall Street open after stocks dragged markets lower.

Bitcoin analysts stick to downside fears

Data from Cointelegraph Markets Pro and TradingView tracked BTC/USD as it recovered from local lows of $16,559 on Bitstamp.

After days of barely any movement up or down, Bitcoin finally saw a flicker of action as traditional markets opened after the Christmas break. Unfortunately for bulls, volatility was to the downside, with BTC/USD seeing its lowest levels since Dec. 20.

On equities markets, United States indexes improved after a weak first day, which nonetheless failed to leave much of an impression on BTC commentators, many of whom stuck to grim short-term price forecasts.

“I can't stress this enough,” Toni Ghinea wrote in part of a Twitter update.

Gold and stocks have underperformed in 2022, but the year has been difficult for Bitcoin (BTC) investors, in particular.

Worst year for Bitcoin since 2018

Bitcoin’s price looks prepared to close 2022 down nearly 70% — its worst year since the crypto crash of 2018.

BTC’s depressive performance can be explained by factors such as the United States Federal Reserve hiking interest rates to curb rising inflationary pressures followed by the collapse of many crypto firms, including Terraform Labs, Celsius Network, Three Arrows Capital, FTX and others.

Some companies had exposure to defunct businesses, typically by holding their native tokens. For instance, Galaxy Digital, a crypto-focused investment firm founded by Mike Novogratz, confirmed a $555 million loss in August due to holding Terra’s native asset, LUNA, which has crashed 99.99% year-to-date (YTD).

Meta, Tesla stocks mirror Bitcoin in 2022

The above catalysts have prompted Bitcoin to drop 65% year-to-date. 

A year-end wager for $80,000 Bitcoin (BTC) might seem entirely off the table now, but not so much back in March as BTC rallied to $48,000. Unfortunately, the two-week 25% gains that culminated with the $48,220 peak on March 28 were followed by a brutal bear market.

It is important to highlight that the U.S. stock market likely has driven those events, as the S&P 500 index peaked at 4,631 on March 29 but traded down 21% to 3,640 by mid-June.

Moreover, such a date coincides with the centralized cryptocurrency lender Celsius issues, which halted withdrawals on June 12, and the venture capital 3 Arrows Capital (3AC) insolvency on June 15.

While the fear of an economic downturn has undoubtedly triggered the cryptocurrency bear market, the reckless mismanagement of centralized billion-dollar entities is what sparked the liquidations, pushing prices even lower.

To cite a few of those events, TerraUSD/Luna collapsed in mid-May, crypto lender Voyager Digital in early July, and the second largest exchange and market marker, FTX/Alameda Research's bankruptcy in mid-November.

Bitcoin (BTC), Ether (ETH) and the crypto market had a rough 2022 from a price perspective, but traders are hopeful that 2023 will include bullish developments that push crypto prices higher. 

Despite the market-wide downturn, a handful of altcoins continued to make a positive contribution to the crypto space and thanks to Ethereum, the term altcoin is no longer a derogatory term.

Let’s explore the top altcoins that made a difference in 2022.

Ethereum fundamentals shone in 2022

Ether’s price hit a yearly high at $3,835 on Jan. 2 and has struggled to regain footing amidst the bear market and other macro factors. The Ethereum network is the top project in 2022 not because of Ether’s price action, but for its fundamentals and for completing the long-awaited mainnet upgrade. The Ethereum merge was completed on Sept. 15, 2022 and while many feared the merge to proof-of-stake (PoS) could cause issues, the transition was flawless.

The main advantage of PoS is that it is much more energy-efficient than proof-of-work (PoW) because it does not require expensive and energy-intensive hardware to validate transactions. This reduces usage costs for the end user and makes it a more sustainable and scalable solution for Ethereum's long-term growth. The Merge also reduced the Ethereum network’s energy consumption by over 99.9%.

Bitcoin (BTC) saw a fresh hint of volatility at the Dec. 27 Wall Street open as United States equities began the final trading week of the year.

Bitcoin ekes out fresh volatility 

Data from Cointelegraph Markets Pro and TradingView followed BTC/USD as it dropped around 1% at the opening bell.

Despite involving a move of only $150, the event was still noticeable on lower timeframes, Bitcoin having shunned any form of volatility for multiple days.

The move came in response to a 0.6% drop in the S&P 500 at the open, with the Nasdaq Composite Index dropping 1.4%.

The U.S. Dollar Index (DXY) responded in kind, making up for ground lost earlier to return to its position from Dec. 25.