17 Dec 2021 | ZebPay Trade-Desk
The market is not quite in end-of-year mode, though one can certainly see it just around the corner. Crypto has traded soft so far this week, with BTC touching below $46k on Tuesday. Bitcoin price lost the $47k support, and altcoin prices dropped by as much as 25% within a matter of moments, before tentatively recovering up to $49k, and falling again. It currently trades around the $49k mark. It’s by no means been a convincing bounce, and it seems like the crypto market is trading in a sideways manner.
Having said that, BTC’s price retraced 8.2% over the past week, but it also outperformed the broader altcoin market. The Fed left rates unchanged. The Fed doubled the pace of tapering to $30bn per month. This means the Fed is reducing the amount of assets it’s buying by 30b per month – resulting in a potential for interest rates to rise – meaning the USD will be stronger and BTC/ETH and Crypto potentially weaker.
ETH has also shown no respite, down approximately 11% week on week. The asset fell below the $3.7k mark and has recovered slightly since. ETH did undergo a hard-fork (Arrow Glacier upgrade) last week, which briefly had a positive impact on price, but that quickly eroded. While bears are in control currently, the market seems to be in a consolidation phase. Considering that most cryptocurrencies took a considerable hit on Dec. 13, the overall market structure has held up nicely.
BTC dominance currently stands at 41.5%, while ETH is at 21%. Notably, the exchange rate of Ether (ETH) against Bitcoin (BTC), reversed from three-year highs to challenge new support. Ethereum scaling and privacy solution Aztec has raised $17 million in a Series A round. Ethereum scaling solutions have been of interest in the community of late. Recently, Vitalik Buterin proposed an Ethereum Improvement Proposal called EIP-4488, which aims to decrease Ethereum Layer 2 gas fees.
Crypto trading platform AscendEX suffered a loss of $77.7 million in a hot wallet compromise last week. Hackers gained access to $8.5mn worth of Polygon (MATIC) tokens, which is probably the reason why the asset has seen a fall of approximately 20% week on week. Having said that, MATIC continues good inflows, and we have seen accumulation after this correction set in.
MATIC made an announcement that Sequoia, Steadview, and other investors were purchasing tokens in a private round. Polygon has seen a code script upgrade. With the new code in place, withdrawal and deposits will be quicker and integrated on various DeFi platforms. Moreover, transactions per second (tps) are expected to increase too, making it a very strong asset fundamentally.
Overall, the week has been an interesting one. Most assets saw some recovery and then fell back again, as the market at large seems to be in a consolidation phase. The next few days shall be crucial for us to be able to assess which side the market will trend, as currently much of it is moving sideways.
Technical Outlook:
BITCOIN:
Bitcoin after peaking at $69,000 witnessed a sharp fall and made the low of $42,000. Post this, the asset is trading below the 20 Day Moving Average and has formed a ‘Descending Triangle’ pattern where the downward sloping line acts as resistance and the horizontal trendline at $46,250 is acting as strong support, and last week BTC is consolidating sideways with low volumes. Bitcoin has very strong support at $43,000, a break below this will lead to a further downfall and to witness a rally the asset needs to close and sustain above $53,000.
ETH:
ETH after making a high of $4,865 has been trading in a downtrend and made a low of $3,436. Currently, the asset is trading in a broad range from $3.675 to $4,100 with low volumes. Breakouts on either side with good volumes will further decide the trend for the asset. The falling moving averages and the relative strength index (RSI) in the below 50 indicate that bears have the upper hand. To witness a rally ETH needs to trade and sustain above the resistance of $4,400.
MATIC:
Matic has been trading in an uptrend since July and the prices have surged to $2.52 from $ 0.62 within six months. Post this move, the asset witnessed a profit booking and the prices corrected almost by 30% making the low of $1.735. Matic has a very strong support zone from $1.45 to $1.75 and has strong resistance at $2.2 and $2.58. Hence, to further rally it needs to break and sustain above the resistance levels.
Weekly Snapshot:
| USD ($) | 09 Dec 21 | 16 Dec 21 | Previous Week | Current Week | |||
| Close | Close | % Change | High | Low | High | Low | |
| BTC | $47,672 | $47,665 | -0.01% | $57,482 | $42,875 | $50,725 | $45,895 |
| ETH | $4,120 | $3,956 | -3.98% | $4,647 | $3,535 | $4,227 | $3,665 |
| MATIC | $2.09 | $2.07 | -0.96% | $2.57 | $1.56 | $2.29 | $1.74 |
| Cryptocurrency | 1w – % Vol. Change (Global) |
| BitCoin (BTC) | -21.86% |
| Ethereum (ETH) | -14.44% |
| Pologon (MATIC) | -43.61% |
| Resistance 2 | $60,000 | $4,865 | $2.52 | $1.75 |
| Resistance 1 | $53,000 | $4,400 | $2.22 | $1.45 |
| USD | BTC | ETH | MATIC | BAT |
| Support 1 | $43,000 | $3,900 | $1.75 | $1.15 |
| Support 2 | $38,500 | $3,350 | $1.45 | $0.95 |
Market Updates:
- German savings banks also known as Sparkassen are planning to launch a pilot in house cryptocurrency wallet and exchange which will allow customers to invest in major digital assets like BTC and Eth directly from their checking accounts.
- Ukraine is additionally set to pilot launch an electronic version of the hryvnia, which is the national currency of Ukrainian on the Stellar blockchain. The pilot, being applied by FinTech firm Bitt and TASCOMBANK, are in purview of the nation’s central bank supported by the Ministry of Digital Transformation.
- Cyprus is taking steps to regulate the crypto industry which was facilitated by the recent released of official document providing a risk assessment for the country about the money laundering risk related to the digital asset trading and virtual asset service providers (VASPs)
- Gita Gopinath, the chief economist of the International Monetary Fund (IMF), has called for a global policy to be put in place that will regulate cryptocurrency, instead of banning it.
*Sources of charts: https://cryptowat.ch, https://pro.zebpay.com/trade/USDT-INR
Disclaimer: This report is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any investor. All investors should consider such factors in consultation with a professional advisor of their choosing when deciding if an investment is appropriate. The Company has prepared this report based on information available to it, including information derived from public sources that have not been independently verified. No representation or warranty, express or implied, is provided in relation to the fairness, accuracy, correctness, completeness or reliability of the information, opinions or conclusions expressed herein. This report is preliminary and subject to change; the Company undertakes no obligation to update or revise the reports to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events. Trading & Investments in cryptocurrencies viz. Bitcoin, Bitcoin Cash, Ethereum etc.are very speculative and are subject to market risks. The analysis by the Author is for informational purposes only and should not be treated as investment advice.
