BTC surged above $45,000, marking its first ascent to this level since January 12th, coinciding with the introduction of spot ETFs. The robust performance of U.S. stock markets since mid-October has lent support to assets like Bitcoin and other crypto assets. Wall Street’s major stock indices have demonstrated significant gains in recent days, with the S&P reaching a new record high of 4,995 on Wednesday, February 7th. The broader crypto market has also witnessed a resurgence, with the total market capitalisation adding $60 billion in just one day. Following a period of relative stagnation, most Altcoins have turned bullish. Ethereum, the leading altcoin, has surged by 2%, propelling its price above $2,400. Similarly, Binance Token has experienced a 4% daily increase, reaching $315. Among the larger-cap altcoins, Solana and Cardano have seen notable gains. Solana has surged by 6%, surpassing the $100 mark, while Cardano has experienced a remarkable 9% increase, trading above $0.5. These positive movements across various crypto assets underscore renewed investor optimism and appetite for digital assets.
Bitcoin surged past the $45,000 mark on February 8th, marking its highest price level since January 12th and showcasing a notable 6% rally over a span of just two days. This upswing coincided with the S&P 500 index hitting a record high on February 7th, suggesting that investors were seeking refuge from inflationary pressures. In addition to the concurrent rise in both crypto and traditional stock markets, data from Bitcoin derivatives markets indicated further potential for bullish momentum. Specifically, BTC futures premium soared to its highest level in three weeks on February 8th, surpassing the 10% threshold typically associated with bullish sentiment. Notably, this metric displayed no signs of excessive optimism, providing a favourable backdrop for Bitcoin to maintain its newfound support at the $45,000 level. However, investors remained cautious in the wake of Bitcoin’s price action following the approval of the spot Bitcoin exchange-traded fund (ETF) on January 10th. Despite the initial euphoria that propelled Bitcoin to heights near $49,000, a subsequent 15.3% correction ensued, driving the price down to $41,500 in less than two days. This heightened volatility led to the forceful liquidation of approximately $150 million worth of long futures contracts, prompting bulls to proceed with caution amidst uncertain market conditions.
Ethereum has displayed a bullish bounce at a crucial support level, suggesting the potential for further price appreciation. This rebound from significant Fibonacci support indicates renewed buying interest, hinting at a possible upward trajectory for Ethereum’s price in the near term. Adding to this optimism, Ethereum’s core developers recently announced plans to roll out the much-anticipated Dencun upgrade around March 13th. This upgrade is expected to introduce a suite of tools aimed at enhancing the speed and affordability of Ethereum transactions. Of particular note is the implementation of proto-danksharding, which promises to further optimise layer-2 networks, making them even more efficient and cost-effective. Developers envision that with the full implementation of danksharding, the Ethereum ecosystem will be capable of handling over 100,000 transactions per second at minimal cost. This advancement holds the potential to significantly enhance Ethereum’s scalability and usability, further bolstering its appeal to users and investors alike.
The United States government is grappling with an unprecedented level of debt, currently standing at a staggering $34.2 trillion, marking a historic high. Federal Reserve Chair Jerome Powell recently acknowledged the long-term challenges posed by this “unsustainable fiscal path” in a February 4th interview. Projections from the Congressional Budget Office paint a concerning picture, forecasting a nearly 66% surge in the U.S. budget deficit over the next decade, primarily driven by escalating debt-servicing expenses. Further exacerbating the situation, Congress’s independent fiscal watchdog has sounded alarms, predicting that the nation’s total public debt is on track to exceed 100% of the gross domestic product by 2025. This looming milestone raises significant concerns regarding the U.S. dollar’s status as the global reserve currency and the demand for U.S. Treasurys.
Technical Outlook:
Bitcoin:
BITCOIN after giving a range breakout above $28,500 witnessed a sharp rally and the prices surged up to $48,969. The asset made a ‘Shooting Star’ candle at the high and failed to give a daily closing above the key resistance of $48,000. The prices corrected almost by 20% and dropped to $38,555. Post this move, BTC made a ‘Hammer’ candle and rallied up to $43,882, and started consolidating between $42,000 to $43,500. The asset gave a range breakout on the upside and is moving up by forming a ‘Higher High Higher Low’ pattern. BTC has a strong support at $40,000 and to further rally it needs to close and sustain above $48,000.
Ethereum:
ETH after giving a breakout above the long-held resistance of $2,146 rallied up to $2,717. The asset faced stiff resistance at the recent highs and failed to cross the key level of $2,750. The prices witnessed a correction and dropped 20% to $2,168. The asset retested and bounced again from the key level of $2,150. ETH has a strong support at $2,400 and to further rally it needs to close and sustain above $2,750.
Binance Coin:
BNB was facing multiple resistance at $255. The bulls finally gave a breakout above the resistance and the prices rallied up to $338. The bulls failed to break the key resistance of $350 and the prices corrected almost by 14.5% from the recent high to $288.8. BNB has strong support at $280 and $255 whereas $335 and $350 will act as a strong resistance for the asset.
Weekly Snapshot:
| USD ($) | 01 Feb 24 | 08 Feb 24 | Previous Week | Current Week | |||
| Close | Close | % Change | High | Low | High | Low | |
| BTC | $43,076 | $45,302 | 5.17% | $43,839 | $39,826 | $45,576 | $42,265 |
| ETH | $2,304 | $2,420 | 5.03% | $2,389 | $2,196 | $2,460 | $2,270 |
| BNB | $300.18 | $318.87 | 6.23% | $312.96 | $290.88 | $320.41 | $298.21 |
| Crypto | 1w – % Vol. Change (Global) |
| Bitcoin (BTC) | -11.85% |
| Ethereum (ETH) | -12.36% |
| Binance Coin (BNB) | 0.08% |
| Resistance 2 | $48,000 | $3,000 | $1.15 | $350 |
|---|---|---|---|---|
| Resistance 1 | $44,500 | $2,750 | $1 | $335 |
| USD | BTC | ETH | Matic | BNB |
| Support 1 | $40,000 | $2,400 | $0.75 | $300 |
| Support 2 | $36,000 | $1,900 | $0.55 | $255 |
Market Updates:
- BlackRock and Fidelity’s spot Bitcoin exchange-traded funds have tallied more assets in their first month of trading than any ETF launched in the United States over the last 30 years.
- U.S-based crypto exchange Kraken has secured its fourth licence in Europe after being granted a virtual asset provider (VASP) licence in the Netherlands.
- The government of Hong Kong will tighten regulations on over-the-counter (OTC) digital assets trade by subjecting it to the same requirements as the retail digital assets trade.
- Big Tech developer Microsoft is extending its reach in Asia with its artificial intelligence (AI) products through a new partnership with the Indian startup- Sarvam AI.
