Crypto Market Weekly Analysis (Dec 26-Jan 1)

News and FundamentalBTC Weekly Jan2022

A few hours before the end of the year, Bitcoin experienced a %5.9 correction and ended the year with a total %60 gain. Let’s check the latest news :

-Marshall Mathers, best known by his stage name Eminem (SlimShady), has become the most recent super celebrity to acquire a Bored Ape NFT. As previously reported by CryptoPotato, the floor price of NFTs from the Bored Ape Yacht Club (BAYC) collection has increased by 35%, while that of other popular collections has declined. The latest to join the craze is none other than Eminem, the hip hop phenomenon and megastar. The Oscar winner spent 123,45 ETH for Bored Ape #9055, which has already been dubbed EminApe by the community.

-The Grayscale Bitcoin Trust, the firm’s largest holding, has seen its AUM drop by 30%, from $43.5 billion to $30.4 billion. The Grayscale Ethereum Trust, the company’s second-largest holding, had its AUM fall by 22%, from over $15 billion to $11.6 billion. These drops coincide with recent price drops in bitcoin and other cryptocurrencies. However, the total AUM is up 170 percent from $16.4 billion a year ago, indicating a growing interest in cryptocurrencies.

-According to Changpeng “CZ” Zhao, CEO of Binance, the crypto industry needs centralized systems in order to interact with traditional banking. On Thursday, the founder and CEO of Binance, the world’s largest crypto exchange by trading volume, was answering customers’ questions for a video on the company’s YouTube account. “The centralized organizations are always ready to f**k you up. #DeFi is the future.” one user said. “If you think that, don’t touch any centralized systems,” CZ said. “Stay in the decentralized world, all the power to you.” He believes that centralized systems are required to help draw money into crypto from traditional banking while also offering an exit option.

-According to a filing with the US Securities and Exchange Commission on Tuesday, ProShares intends to create an exchange-traded fund devoted to the metaverse. The Solactive Metaverse Theme Index will be tracked by the ProShares Metaverse Theme ETF if it is authorized. Companies that supply or employ metaverse-related technology, such as data processing and metaverse devices, are included in the index. The index’s top three weightings are Apple Inc., Meta Platforms Inc., and Nvidia Corp.

-MicroStrategy, a business analytics organization, has acquired $94 million in Bitcoin (BTC) at an average price of $49,229. MicroStrategy bought 1,914 bitcoins for $94.2 million between December 9 and December 29, according to a statement with the US Securities and Exchange Commission on Thursday, bringing its total bitcoin holdings to 124,391. The company’s assets are now valued at almost $5.9 billion, a gain of over $2.1 billion.

According to a tweet sent on Thursday, Mexico has declared that it will launch a new national central bank digital currency (CBDC) in 2024. The Mexican presidency’s account tweeted that “new technologies and next-generation payment infrastructure” will help the country become more financially inclusive.

-The capitulation of Chinese miners precipitated by the country’s new crypto mega ban, which was enacted in September, appears to have boosted retail cryptocurrency mining in Thailand. According to Al Jazeera, Thai entrepreneurs and cryptocurrency enterprises have been increasingly capitalizing on Chinese miners selling their crypto mining machines.

-The current volatility in Bitcoin’s (BTC) price, according to Real Vision CEO Raoul Pal, is due to institutions selling to help cover their end-of-year profits. In a Monday interview with Vlad from The Stakeborg Talks, the perennial Bitcoin bull stated that the market is now imbalanced due to the impact of institutions. They’ve been selling to lock in earnings, according to Pal. It was a way for businesses to say, “I believe in getting paid.”

-Local energy officials have decided to cease operations of approved cryptocurrency mining centers as Iran’s energy usage rises over the winter. Iran is shutting down crypto mining facilities again, according to Mostafa Rajabi Mashhadi, chairman of the board and managing director of Iran Grid Management Company (Tavanir), in order to cut liquid fuel use in power plants while temperatures drop.

-According to reports, the Bank of Israel (BoI) has authorized local banks to accept revenues from digital asset ventures as long as the source of the funds is not tied to illicit activities. The protocol is meant to be used in conjunction with the Money Laundering Prohibition Ordinance, which covers crypto-related businesses and operations.

Onchain Analysis

Exchanges Reserves (Update)

BTC Exchanges Reserves Jan2022

As we noted in our last weekly analysis, we have seen a shakeout due to the increasing Exchanges Reserves. The price has fallen by almost 12%, whereas the Reserves were soaring up. However, after that, the Exchanges Reserves metric has continued on its big-picture downtrend, showing that some players have been accumulating BTC during the recent pullback to the $46,000 level. On the other hand, the 30-day Rate Of Change has been negative for a long period of time, which is a long-term bullish sign for the price.

Long/Short Liquidations

BTC Liquidations Jan2022

A few hours before the start of the new year, the market experienced huge volatility, which led to a substantial long and short liquidation in just 12 hours. First, bulls got control of the market by raising the price by almost $1257 (2.6%) in an hour and liquidated a huge number amount of short positions (red vertical line), but right after that, bears came into the play and reversed the market by dropping the price by more than 6% and liquidating a huge amount of long positions. Considering the high levels of the Estimated Leverage Ratio, we may see some volatility in the price in the mid-term with many long and short liquidations.

Exchanges Netflow

BTC Netflow Jan2022

The Netflow of the exchanges has spent 2021 fluctuating between ±5k BTC. In fact, during the previous week, we’d seen yet another flip from net exchange outflows to net exchange inflows. This is something to watch in the short term to determine if the trend weakens or strengthens. As shown in the chart, the Exchanges Netflow has soared during 22–28th of December and we saw a huge net exchanges inflow, which is a bearish sign in the short-term, which has led to a shakeout and a 12% drop in the price. Right now, the metric shows negative amounts, indicating a short-term accumulation during the price volatility.

Technical analysis

Bitcoin

Weekly Time Frame

BTC Technical Weekly Jan2022

After reaching the latest ATH of $69K on November 10, Bitcoin was quickly rejected and began a negative trend. We can see a bearish divergence with the price on the MACD indicator, which eventually played out and resulted in a price decline. The MACD indicator recently verified a reversal of the mid-term positive trend, as well as a reversal that occurred shortly before the huge crash of May 2021, as seen in the chart below (marked by blue vertical lines).

Daily Time Frame

BTC Daily Jan2022

BTC is currently trading below the 100-day Moving Average (green line) and battling the 200-day Moving Average (purple line). The latter acts as a historically substantial price support/resistance. The blue trendline is now the price’s next major resistance, while the yellow trendline may be the price’s next major support.

The $40-41K zone is the most solid support point in this range further down. If BTC falls below this level, it will form a lower low, which is a negative indication, and the road to $30K will be paved quickly.

4H Time Frame

BTC 4H Jan2022

After the latest shakeout, Bitcoin developed a reversal flag pattern (yellow trendlines) and broke it from the top, followed by a decent pullback to the upper trendline — and a breakout was confirmed. However, the price was also rejected by the 200-MA line, and it appears that a new leg down has begun. The price is currently battling two significant support zones: the blue trendline and $45–46K.

Dogecoin

Daily Time Frame

Dogecoin Daily Jan2022

Dogecoin, one of the most famous cryptocurrencies in the world, has soared by almost 22,247% in the first half of 2021, but it got rejected from there and has dropped by over 79% at the end of the year and has started 2022 at the $0.17 zone. Doge had had a great trendline as a support for the price (blue line), but due to the market crash, it lost the support and retested it with a pullback, then turned it into a new resistance.

4H Time Frame

Dogecoin 4H Jan2022

In the 4H hour time frame, Doge has lost another great support area of $0.19-$0.2 zone and retested it as a pullback but got rejected. Hence, this zone is now a strong resistance zone for the price.

 

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I'm Shayan(mostly known as Greatest Trader) an onchain analyst, Bitcoin lover, and Crypto enthusiast. I am currently a verified author and community specialist at CryptoQuant.

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