07 January 2022 | ZebPay Trade-Desk
In the first half of this week, there seems to be a lot more direct purchasing of altcoins, which had some interesting effects. BTC hasn’t been able to get the support it usually sees at the top of the month, and correlations broke down a bit, which is why we have seen the asset continue to slide downwards since the start of the year. At the meeting on Wednesday, the Fed seemed more eager than in the past to shrink its balance sheet and to raise rates.
Almost all of the officials revised their inflation forecasts higher. Crypto markets have reacted to this adversely, down by 4% over the past 24 hours. BTC has fallen by 6% in the same time period, and its dominance at 39.2%, while ETH has fallen by 3.5%, and its dominance currently stands at 20.2%. ETH has fared better than BTC so far this year, both in terms of price thresholds, and also the inflow that the asset has been witnessing. Having said that, given that BTC is the king of the crypto space, and it has been underperforming for a while now, it would be safe to assume that the next rally would most likely have to be a BTC-led one.
The crypto market has plunged today after witnessing a correction in the global stock market and is visibly in red. Digital market capitalization has fallen by 7.79% in the last 24 hours. The hawkish view of the Federal reserve was visible in the minutes of the meeting leading to the outcome that an accommodative monetary policy is going to end soon, along with a sharp trimming of bond holdings. The concerns regarding inflation and early rate hikes have saddened the market mood. BTC’s plunge can also be attributed Kazakh government’s decision to resign and shut down the internet amid protests, causing the #Bitcoin network hash rate to tumble by 13.4%. No timeline exists as to when the internet will switch back on in the 2nd biggest BTC mining country in the world. Having said that, traders and investors alike are using this to buy on dips as the global volume has risen by 23.31% over the day.
Currently, the 24-hour global volume stands at $120.28 billion. The trend persists across assets. Namely, we have seen volumes skyrocket in ETH (63%), BNB (95%), SOL (81%), MATIC (55%), ADA (69%), DOT (44%) and BAT (15%), indicating that the market does seem to look quite attractive at these levels.
The year 2022 has started off with investors having become a little cautious, and seem to be shying away from riskier investments such as cryptocurrencies due to the emergence of the Omicron variant. As the variant spreads across the globe, both traditional, as well as crypto markets, have taken a hit over the past few weeks. Most assets seem to be in a consolidation phase as of now. 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. While the macroeconomic environment with respect to regulation, technological development, and adoption remain positive, much of the sentiment will be driven by what the pandemic has in store for us moving forward.
Technical Outlook:
BITCOIN:
Bitcoin was trading in a range from $45,000 to $52,000 over a month. The asset gave a breakout on the downside of the range and started going down by forming a ‘Lower Top Lower Bottom’ pattern. Bitcoin has strong support at $39,500. If the prices hold the support then we can expect a bounce or a relief rally whereas a break below $39,500 will lead to a further downfall and the prices can slide to $35k levels.
ETH:
ETH, last month was trading in a ‘Symmetrical Triangle’ pattern. After giving a breakout on the downside the asset took support at $3,600 and showed signs of recovery. However, the bulls were not able to push the prices above the trendline and the 20 Day Moving Average and started moving down. ETH has broken the key support of $3,350 and made the low of $3,144. The asset has a strong support zone from $3,000 to $2,950. If it breaks the support then the prices can further slide to the next support which is at $2,650.
MATIC:
Matic after making the top of $2.92 witnessed a sharp fall and the prices corrected almost by 30% making the low of $2.02. The asset is trying to take support at the crucial level of $2.04 (61.8% Fibonacci Retracement Level) and the lower shadows indicate buying at these levels. If Matic trades and closes below $2.04 and then it can further slide to the next support which is at $1.80.
Weekly Snapshot:
| USD ($) | 30 Dec 21 | 06 Jan 22 | Previous Week | Current Week | |||
| Close | Close | % Change | High | Low | High | Low | |
| BTC | $47,178 | $43,160 | -8.52% | $51,814 | $46,060 | $48,473 | $41,378 |
| ETH | $3,714 | $3,418 | -7.96% | $4,139 | $3,995 | $3,877 | $3,199 |
| MATIC | $2.56 | $2.25 | -12.11% | $2.92 | $2.41 | $2.67 | $2.06 |
| Cryptocurrency | 1w – % Vol. Change (Global) |
| BitCoin (BTC) | 29.79% |
| Ethereum (ETH) | 10.90% |
| Pologon (MATIC) | -37.25% |
| Resistance 2 | $53,000 | $3,650 | $2.70 | $1.45 |
|---|---|---|---|---|
| Resistance 1 | $45,000 | $3,350 | $2.40 | $1.20 |
| USD | BTC | ETH | MATIC | BAT |
| Support 1 | $39,500 | $3,000 | $2.04 | $1.00 |
| Support 2 | $35,000 | $2,650 | $1.80 | $0.88 |
Market Updates:
- Decentralized lending platform Aave has launched its permissioned lending and liquidity service Aave Arc to help institutions participate in regulation-compliant decentralized finance.
- Money transmission network MoneyGram now has a minority investment in crypto ATM operator Coinme following a Series A funding round.
- Ethereum competitors, such as Polkadot, Solana and Binance Smart Chain (BSC), are growing faster in terms of development activity according to crypto research firm Electric Capital.
- Airbnb’s CEO suggested that the platform’s possible crypto payment option would not be restricted to one or two digital currencies.
- The government of Kosovo has ceased crypto mining in the country owing to power constraints during the winter season.
*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.
