Newsletter Volume 12
As of Friday, 27th January 2023
Bull & Bear
Article 1: The Market This Week
The global cryptocurrency market had reached a total market capitalization of $1.04 trillion, with the volume of all stablecoins accounting for 89.40% of the total 24-hour volume on Friday. While some analysts believed that the market would continue to grow in the short-term and long-term, others had raised concerns about potential risks.
Let’s take a look at some cryptocurrencies and their performance over the week. Bitcoin experienced fluctuations around the $23,000 mark this week. The "Fear and Greed Index" of the cryptocurrency market had shifted towards "greed" once again on Friday, after a period of 10 months. While some investors were looking to slow down the upward trend at this level, others were determined to push for further gains.
Ether (ETH) saw a sharp decline after forming Doji patterns, indicating uncertainty resolved in favor of bears. The ETH/USDT pair corrected to crucial support at the 20-day EMA of $1,496.
Whereas BNB saw a surge above the resistance of $318 on Jan 24, but bulls failed to maintain breakout as seen by long wick on a candlestick. Bulls bought dip to 20-day EMA ($290) on Jan 25 as seen by long tail on candlestick. This suggests that Binance Coin BNB/USDT may have fluctuated between 20-day EMA and $318 as bulls and bears competed. A rise above $318 could have pushed the pair to $360, while a drop below 20-day EMA could have led to a decline to 50-day SMA ($270).
Ripple (XRP/USDT) broke above $0.42 resistance on Jan 23, but it was a bull trap as bears pulled it back below that level on Jan 24. The critical level to watch on the downside was the 20-day EMA ($0.38). If the price rebounded from this support, it suggested buyers continued to buy at lower levels, and bulls would try to push above $0.42 to $0.44 zone. Success could have led to an up-move to $0.51. If bears strengthened, they would need to drag the price below the 20-day EMA, which may have caused short-term traders to take profit and the pair to fall to 50-day SMA ($0.37)
Cardano hit resistance near $0.38, bears thwarted bulls' attempts to break through it between Jan 22 and 24. RSI indicated a potential slowdown in bullish momentum. Sellers could have strengthened their position if they pulled and sustained the price below 20-day EMA ($0.34), which could have caused the pair to fall to $0.32 and then to 50-day SMA ($0.30). If the price rose above $0.38, it negated the negative divergence and the pair could have risen to $0.44.
Key Indicators
Crypto Market Cap: $1.08 Trillion
Bitcoin Market Cap: $445.7 Billion
Ethereum Market Cap: $191 Billion
Ethereum Gas Price: 38 Gwei
DeFi TVL: $71.7 Billion
Article 2: Weekly Review of IC15
The IC15 Index, or "Index of Cryptos," tracks the performance of liquid and widely traded cryptocurrencies worldwide using a market capitalization-weighted approach. This review will focus on the top constituents of the index.
The crypto market regained the $1 trillion mark on 23rd Jan, with Bitcoin trading above $22,000. The IC15 index ended at 32,889, up 222 points with Dogecoin, Avalanche, XRP, and Chainlink as major contributors. The Central African Republic is creating a regulatory framework for cryptocurrencies and the Stellar Development Foundation has joined the US CFTC advisory committee. Massachusetts House introduced a bill for a special commission on blockchain technology.
On 24th Jan, the IC15 Index was up 5 points to 32,894 with major gainers being Polkadot, Binance, Avalanche and Litecoin and major losers being Uniswap, Ethereum, Dogecoin, and Shiba Inu. The market capitalization of cryptocurrencies is above $1.05 trillion, with Bitcoin trading at nearly 23,000. The Chairman of the Central Bank of Singapore and Fabio Panetta, executive board member (ECB) both advocate for regulations and clarity in the crypto market. Japan's FSA is planning for regulations to allow investors to use stablecoins and South Africa's Advertising Regulatory Board has modified its Code of Advertising Practice to include disclosing risks associated with crypto investments.
The IC15 benchmark index for cryptocurrencies decreased by 3.00% on Friday with major losers being Shiba Inu, Polygon, Cardano, and Solana in the range of 6-7%. Market capitalization is currently at $1.022 trillion.
Arizona senators are considering a bill to allow voters to decide whether to exempt virtual currencies from property taxes. Saudi Arabia’s Central Bank announced its continued efforts in exploring the economic impact, market readiness, and potential robust and fast applications of a CBDC-based payment solution. Blockstream raised $125 million to fund its Bitcoin mining colocation services, and blockchain developer QuickNode raised $60M at an $800M valuation with participation from Tiger Global, Seven Seven Six, and QED.
Article 3: Battle of Bull and Bear
Bitcoin prices consolidated on Friday, as traders awaited the release of consumer sentiment figures from the United States. After reaching a five-month high on Thursday, prices dropped below $23,000. Ethereum also decreased, falling below $1,600.
Bitcoin has recovered from a recent dip and is currently trading around $22,950. This is relatively stable compared to the past 24 hours. BTC had dipped below $22,500 the previous day, along with most other major cryptocurrencies, likely due to profit-taking following a four-day rally. Despite this, Bitcoin has seen an increase of more than 35% in value this year.
Aptos, token of Layer 1 blockchain reached an all-time high. The token's performance has surpassed that of the two largest cryptocurrencies by market cap, Bitcoin and Ether, which have seen gains of 30% and 34% respectively in 2023. The second largest cryptocurrency by market value is currently trading at around $1,580, down approximately 2.1%.
Popular meme coins Dogecoin (DOGE) and Shiba Inu (SHIB) have dropped by 2.6% and 3.3% respectively. However, Play-to-earn platform Axie Infinity's cryptocurrency, AXS, has continued to rise. AXS reached a four-month high of $13.94 earlier this Monday and was up 13% at one point on Tuesday. It is currently up about 2%.
Polygon's MATIC token has risen 8% on Friday, and is up 48% since December 31st. It has seen a spike in daily transactions, making it the second largest blockchain for daily active users. Optimism's OP token has also seen a recent surge and reached an all-time high of over $2.50.
Market Sentiments
Article 4 - Weekly Spotlight
Tesla Inc. announced its Q4 2022 earnings on Wednesday, revealing a decrease in net digital assets from $218 million in the previous quarter to $184 million. No digital assets were purchased or sold during this quarter. The company’s digital assets, primarily in the form of bitcoin, saw a decline in value due to fluctuations in the price of BTC, resulting in an impairment charge of $34 million. While the exact amount of Bitcoin held by Tesla is not publicly disclosed, industry estimates suggest the company holds around 9,720 BTC. In addition to Bitcoin, Tesla also holds a small amount of Dogecoin, which it acquired through accepting payments for merchandise in the cryptocurrency. The company had previously purchased $1.5 billion in BTC in early 2021 but has not made any additional purchases since. CEO Elon Musk has stated that the company sold some of its BTC holdings in Q2 2021 to increase its cash position amid uncertainties surrounding the lifting of Covid-19 lockdowns in China, but remains open to increasing its Bitcoin holdings in the future.
