The surge in crypto prices in 2023 has sparked increasing optimism, fueled by expectations of the approval of a spot Bitcoin ETF, the upcoming BTC halving, and a generally positive market sentiment. Despite a cautious start to the year, events throughout 2023, including notable price increases in Bitcoin, Ethereum, Solana, and various altcoins, have surprised market participants and hinted at the potential for a bull market in 2024. The global crypto market cap currently stands at $1.63 trillion, reflecting a remarkable 112% increase over the last 12 months. Notably, Bitcoin and Ether have experienced substantial gains of 154% and 93%, respectively. Altcoins such as Solana and Avalanche have demonstrated even more significant growth, with increases of 880% and 250%, highlighting the heightened volatility in the crypto market. Key factors contributing to the surge in crypto prices include growing optimism surrounding the potential approval of a spot Bitcoin ETF, the successful Shanghai upgrade for the Ethereum network, and the anticipation of the Bitcoin halving event, scheduled within the next 180 days.
BTC has remained stagnant below $43,000 this week, with institutional buying having minimal impact on the markets. The price action for BTC is confined to a narrow range for the seventh consecutive day. Following a 15% drop in two days last week after the launch of the first United States spot exchange-traded funds (ETFs), Bitcoin has not shown significant movement, disappointing traders. While avoiding further downside, the bulls lack the momentum to push BTC/USD back to the upper end of its broader trading range, with $48,000 acting as a ceiling. Material Indicators, a trading resource, highlighted a significant issue—there is too much liquidity around the spot price. The conversion of the existing Grayscale Bitcoin Trust into an ETF resulted in nearly $30 billion being invested in bitcoin ETFs immediately, as per data compiled by CoinDesk. In comparison, silver ETFs have combined assets of approximately $11 billion.
On Thursday,18th Jan Ethereum (ETH) exhibited minimal price movement, reflecting the broader trend in the crypto market. The anticipation of a potential Ethereum ETF, following the introduction of a Bitcoin ETF, contributed to a brief price increase. However, given the SEC’s cautious approach and the historical precedence of Ethereum following Bitcoin’s lead, any Ethereum ETF approval might take time. Ethereum typically plays a secondary role to Bitcoin, often adopting a “follow the leader” stance in the market dynamics. The technical indicators on Monday provide a nuanced view of the market. The relative strength index (RSI) at 60.6 suggests a neutral to bullish outlook. Moving averages further reinforce a bullish sentiment in the Ethereum market, with both EMA and SMA across multiple time frames indicating a consistent upward trend. This alignment underscores a robust and recent bullish trajectory in the market.
The recent strengthening of the U.S. dollar is placing downward pressure on Bitcoin. The U.S. Dollar Index (DXY) has exhibited a noteworthy increase, reversing from 101 in early January to trade at 103.50 on Jan. 18, successfully deflecting pressures from the 100-day EMA. This robust dollar strength is driven by growing demand and an uptick in the U.S. Treasury yields. December 2023 retail sales data from the U.S. Census Bureau surpassed expectations, recording 0.6% growth compared to the forecasted 0.4% and the previous period’s 0.3%. The U.S. Treasury yields have also experienced a notable increase, indicating market adjustments to the Federal Reserve’s rate-cutting expectations. The U.S. economy’s recent strength, supported by favourable data, is influencing the market’s dovish expectations, although odds for rate cuts in March and May remain around 50 basis points. The combination of these factors is contributing to the dollar’s strength and, consequently, putting pressure on crypto prices.
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 16% and dropped to $40,683. 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 minor correction and dropped 10.5% to $2,428. 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 a strong support at $280 and $255 whereas $335 and $350 will act as a strong resistance for the asset.
Weekly Snapshot:
| USD ($) | 11 Jan 24 | 18 Jan 24 | Previous Week | Current Week | |||
| Close | Close | % Change | High | Low | High | Low | |
| BTC | $46,399 | $41,262 | -11.07% | $48,969 | $42,785 | $46,498 | $40,631 |
| ETH | $2,620 | $2,467 | -5.83% | $2,688 | $2,172 | $2,710 | $2,426 |
| BNB | $308.70 | $313.29 | 1.49% | $327.04 | $290.12 | $319.59 | $290.74 |
| Crypto | 1w – % Vol. Change (Global) |
| BitCoin (BTC) | -29.38% |
| Ethereum (ETH) | -14.74% |
| Binance Coin (BNB) | -2.98% |
| Resistance 2 | $48,000 | $3,000 | $1.15 | $350 |
|---|---|---|---|---|
| Resistance 1 | $44,500 | $2,750 | $1 | $338 |
| 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:
- Crypto wallet provider MetaMask has rolled out a new staking service enabling Ethereum users to run their very own validator node.
- Spot Bitcoin exchange-traded fund (ETF) issuers added another net 10,667 Bitcoin to their crypto stacks on their fifth trading day amid increasing trading volumes.
- Bitcoin miner Hut 8 has seen its share price tumble more than 23% on Jan. 18, the same day the firm rang the Nasdaq’s opening bell and another spread an unverified report alleging insiders are preparing to dump its stock.
