The global crypto market cap traded higher at around $890 billion, up 4% in the last 24 hours. The total volume in Defi is currently $3.6 billion, 7.97% of the entire crypto market’s 24/7 volume. The volume of all stablecoins is now $41.75 billion, which is 92.16% of the total 24-hour crypto market volume. Bitcoin price surged on Jan. 12 and a quick rebound in crypto prices across the market has some investors hoping that a yearly high of $18,898 will be a sign that BTC has bottomed. After a continuation of last week’s rally in equity markets, a cooling US Dollar Index (DXY) and upbeat inflation data in the Consumer Price Index (CPI) report could see BTC at the top end of the $18,000 range hold. A key catalyst for the recovery appears to be the upbeat Bureau of Labor Statistics (BLS) CPI report, which showed headline inflation fell by 0.1% for all urban consumers. The drop in inflation was the sharpest since April 2020. Stock traders are also reacting by raising prices in hopes that positive data will spur less aggressive rate hikes by the Federal Reserve in the Federal Open Market Committee (FOMC) meeting on February 1. The stock market opened higher on Jan 12 with the Dow Jones, S&P 500 and Nasdaq posting positive numbers.
The price of BTC is up 15% in the last 13 days and in that period traders’ bearish bets on BTC futures have been liquidated by more than $530 million versus their bullish ones. After rallying to $19,000 on Jan. 12, Bitcoin hit its highest price since the FTX crash on Nov. 8. The move was largely driven by the US Consumer Price Index (CPI) expectation for December, which coincided with the consensus at 6.5% YoY, indicating inflationary pressures likely peaked in June at 9%. The Margin Lending ratio rose steadily on Jan. 11, suggesting that professional traders added leverage to long positions as Bitcoin surged to $18,300. More importantly, the metric(currently at 21) favours stablecoin lending by a wide margin, indicating the bears are not confident to open bitcoin margin short positions. Although Bitcoin broke the $18,000 resistance, professional traders have kept their leveraged long positions unchanged according to the long-to-short indicator. Traders using futures contracts were not confident enough to add leveraged bullish positions despite the price rally. While margin data shows that significant leverage was used to push Bitcoin above $18,000, it suggests the situation was temporary. Most likely, these professional traders deposited more margin and consequently reduced their leverage after the event. Essentially, the metric is looking very healthy as it shows that margin markets are not overbought.
Ethereum whales and market makers are no longer charging excessive premiums for hedge put options, a sign that the ETH price could be on the way to new highs. After testing the $1,200 support on Jan 1, the 8-week rising channel has shown strength, but Ether bulls fear the stream of negative news could break the pattern to the downside. Derivatives traders using futures contracts exited the negative spread on Jan. 1, meaning the extreme bearish sentiment has dissipated. However, the current premium of 1.5% remains below the 4% threshold for a neutral market. Still, the lack of buyer demand for leverage doesn’t mean traders are anticipating a sudden market downturn. Overall, both the options and futures markets are suggesting that professional traders are becoming more confident and the chances of $1300 turning into a support level are increasing. Therefore, even if the news flow does not look attractive, traders are not willing to add bearish bets, which could lead to further positive momentum for Ether.
On the macro front, Despite the positive price development, sentiment around the ether and other crypto assets were not very attractive. For example, on Jan. 8, Xiao Yi, the former secretary of the Chinese Communist Party in Fuzhou, admitted to having “acted recklessly” to support crypto mining. Speaking from what appeared to be a prison, Xiao apologized for causing “serious casualties” in the Fuzhou area. On January 10 South Korean tax officials reportedly raided the offices of crypto exchange Bithumb to investigate a possible tax evasion case. On December 30, Park Mo, an executive at Bithumb’s parent company, was found dead despite being investigated for embezzlement and stock price manipulation. Also on January 10, Cameron Winklevoss, co-founder of the Gemini exchange, sent in a candid Letter to Barry Silbert, CEO of Digital Currency Group. In the letter, Winklevoss raises some serious fraud allegations and calls on Grayscale’s fund management holding company to fire Silbert to find a solution for Gemini’s earn users. Major US crypto exchange Coinbase announced a second round of layoffs affecting 20% of the workforce.
Technical Outlook:
Bitcoin:
BTC was trading in a narrow range from $16,000 to $17,500 over the past three weeks. The asset finally gave a breakout on the upside of the range and made the weekly high of $19,117 by forming a ‘Higher High Higher Low’ pattern. However, the bulls need to surpass the hurdle of $22,500 for the resumption of the medium-term bullish trend. $20k will also act as the psychological resistance for the asset whereas $18,000 to $17,500 will act as a strong support for BTC.
ETH:
ETH too was trading sideways in a narrow range from $1,150 to $1,250 forming a series of small candles with low volumes. The asset gave a breakout on the upside and went up to $1,439 but with low volumes. If the prices sustain above $1,400 then we can expect it to further rally up to the next resistance which is at $1,750. The $1,500 mark (200 Day Moving Average) will act as a minor resistance. Whereas $1,250 will act as strong support for the asset.
BNB:
BNB after making the low of $220 showed signs of recovery and went up to $255. The asset was facing stiff resistance at $255 and was consolidating in a narrow range. BNB broke the resistance and rallied up to $291.7. The asset will face strong resistance at $300 and we can expect some profit booking at these levels. Once the bulls breach these levels then we can expect it to further rally up to $336.
Weekly Snapshot:
| USD ($) | 05 Jan 23 | 12 Jan 23 | Previous Week | Current Week | |||
| Close | Close | % Change | High | Low | High | Low | |
| BTC | $16,836 | $18,869 | 12.08% | $16,965 | $16,408 | $19,030 | $16,716 |
| ETH | $1,250 | $1,418 | 13.40% | $1,259 | $1,187 | $1,432 | $1,241 |
| BNB | $256.42 | $287.81 | 12.24% | $260.52 | $241.69 | $287.98 | $255.07 |
| crypto | 1w – % Vol. Change (Global) |
| BitCoin (BTC) | 26.60% |
| Ethereum (ETH) | 60.52% |
| Binance Coin (BNB) | 36.90% |
| Resistance 2 | $28,500 | $1,750 | $1.20 | $336 |
|---|---|---|---|---|
| Resistance 1 | $22,500 | $1,400 | $1.05 | $300 |
| USD | BTC | ETH | Matic | BNB |
| Support 1 | $17,500 | $1,250 | $0.75 | $55 |
| Support 2 | $15,500 | $1,000 | $0.62 | $215 |
Market Updates:
- Actress and model Alejandra Guajardo represented El Salvador in the preliminary competition of the Miss Universe 2022 pageant by wearing a costume featuring Bitcoin during her walk across the stage.
- Lagos, the capital of Nigeria — Africa’s most populous country — welcomed a new Bitcoin Lightning Network (LN) node this week, a vital step to better connect the continent to the layer-2 payments network that sits atop Bitcoin.
- The United States Securities and Exchange Commission (SEC) on Jan. 12 charged crypto lending firm Genesis Global Capital and crypto exchange Gemini with “offering unregistered securities through Gemini’s “Earn” program”.
- Troubled crypto lender Nexo is facing more pressure from regulators, with its offices reportedly raided as part of an international investigation. A group of prosecutors, investigators, and foreign agents searched the company’s offices in the Bulgarian capital city of Sofia.
