Tag: Market Analysis

Digital Asset Investments Surge to $117 Million

by Blockchain News

The European cryptocurrency investment firm CoinShares published its “Digital Asset Fund Flows Report” on January 30. The report revealed that investments in digital assets experienced a surge in inflows last week, reaching $117 million, the highest amount since July 2022. CoinShares is a European investment firm that specialises in cryptocurrencies.

According to a research by CoinShares, the total assets under management for the sector increased to $28 billion, representing a 43% gain from its lows in November 2022. The rise in the volume of investment products exchanged during the week was obvious, totaling $1.3 billion, which represents a 17% increase in comparison to the average for the first 10 months of the year. During this time, weekly trading volumes on the market for digital assets have increased by an average of 11%.

After Germany, Canada, the United States of America, and Switzerland, which each got $30 million, $26 million, and $23 million correspondingly, the country that had the biggest inflows over the last week was Germany, which accounted for 40% of the total ($46 million). The majority of the inflows, totaling $116 million, were invested in Bitcoin (BTC) products, whilst just $4.4 million was invested in short-Bitcoin products, demonstrating that investors had conflicting opinions about the cryptocurrency.

In addition, the report disclosed that multi-asset investment products had seen withdrawals of funds for the ninth week in a row, with the total amount reaching $6.4 million. This seems to indicate, according to James Butterfill, who is in charge of research at CoinShares, that investors are choosing to put their money into more specialised projects. Altcoins such as Solana (SOL), Cardano (ADA), and Polygon (MATIC) witnessed inflows as a result of this trend. On the other hand, Bitcoin Cash (BCH), Stellar (XLM), and Uniswap (UNI) suffered slight outflows.

In addition, investors shown interest in blockchain equities, contributing a total of $2.4 million in new capital. On the other hand, a more in-depth investigation finds that opinions continue to vary depending on the supplier.

The market for digital assets as a whole saw substantial growth over the course of the last week, with investment products witnessing record inflows and better volumes.

The overall trend indicates that investors are becoming more choosy in their investments, with mixed feelings concerning blockchain stocks, despite the fact that this attitude is consistent with the trend.

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Bitcoin Gains Momentum Based on Positive CPI Numbers

by Blockchain News

After slipping to lows of $15.5K amid FTX’s liquidity crunch, Bitcoin (BTC) gained momentum due to better-than-expected consumer price index (CPI) numbers released by the U.S. Bureau of Labor Statistics.

Crypto and market education platform IncomeSharks tweeted:

“Bitcoin has an easy path back to $20k as Stocks pushing up and positive CPI numbers.”

Bitcoin was up by 3.78% in the last 24 hours to hit $17,281 during intraday trading, according to CoinMarketCap. 

The CPI surge was lower than expected because it rose by 0.4% in October, the lowest since January 2022. The U.S. Bureau of Labor Statistics pointed out:

“The all items index increased 7.7 percent for the 12 months ending October, this was the smallest 12-month increase since the period ending January 2022. The all items less food and energy index rose 6.3 percent over the last 12 months … all of these increases were smaller than for the period ending September.”

The lower CPI numbers triggered a bullish reaction in the BTC market because this might mean that the Federal Reserve (Fed) will ease interest rate hikes, which have been detrimental to the crypto ecosystem.

The Fed has been increasing interest rates to the tune of 75 basis points (bps), and this is one of the primary factors hindering a significant leg up for cryptocurrencies.

Despite the positive CPI numbers, the crypto market is still not out of the woods yet as bears continue to bite. Market insight provider Material Indicators explained:

“CPI was lower, Jobless Claims were higher. FireCharts shows the crypto market’s initial reaction to a beat on the forecasted economic numbers. Bear Market Rally is still alive BTC.”

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Source: MaterialIndicators

The collapse of FTX, one of the leading crypto exchanges, has also made the digital asset space shaky.

Reportedly, the liquidity issue facing FTX might have emanated from the exchange’s CEO, Sam Bankman-Fried, secretly transferring at least $4 billion to boost its trading arm Alameda Research, with part of the funds being customer deposits.

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Bitcoin’s Small to Mid-Sized Addresses Continue Going Through the Roof

by Blockchain News

As Bitcoin (BTC) continues hovering around the $19K zone, small to mid-sized addresses are scaling the heights, according to Santiment. 

The market insight provider explained:

“Bitcoin’s small to mid-sized addresses (holding 0.1 to 10 BTC) hold an AllTimeHigh 15.9% of the coin’s available supply.”

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Source:Santiment

Therefore, Bitcoin addresses have been witnessing heightened activity. Santiment added:

“The number of Bitcoin addresses holding 10,000 to 100,000 $BTC & addresses holding 10 to 100 BTC have reached their highest amount of respective addresses since Feb, 2021. As the number of addresses on a network rises, utility should follow suit.”

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Source: Santiment

The market insight provider expects Bitcoin’s use case to surge as the number of addresses increases. This is a bullish sign because demand might rise, pushing prices upwards.

Holding the ground at $19.3K level is crucial 

Since Bitcoin has lacked a significant leg up thanks to tightened macroeconomic conditions, Michael van de Poppe believes holding the $19,300 zone is fundamental because this can prompt a push to the $22,000 area. The crypto analyst pointed out:

“The area around $19.3K is key to hold and then we can expand to $22.2K.”

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Source:TradingView/MichaelvandePoppe

Similar sentiments were recently shared by analyst Ali Martinez who stipulated that the leading cryptocurrency should stay above $19,200 to reduce selling pressure, Blockchain.News reported. 

Bitcoin was hovering around $19,260 during intraday trading, according to CoinMarketCap.

On the other hand, a market analyst under the pseudonym Tajo Crypto believes Bitcoin is not out of the consolidation woods yet based on unfavourable conditions like inflation and interest rate hikes. Tajo Crypto noted:

“Bitcoin has been between $18K and $25K since July and there seems not to be enough catalyst to make it drop to $17K or pump to $26K. The inflation and rate hike will make Bitcoin continue to struggle till prices normalize. Bitcoin consolidation is far from over.”

Therefore, it remains to be seen how the market plays out in the short term because the UNCTAD recently warned that if tightened fiscal and monetary policies continue, a global recession would be inevitable. 

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Bitcoin’s Volume Dominates Performance More than Volatility, Cumberland Suggests

by Blockchain News

Even though some analysts have stipulated that Bitcoin’s volatility is a cause for concern, crypto trading firm Cumberland believes volume is what matters the most.

Cumberland stipulated that Bitcoin volume “remain absolutely massive,” given that BTC derivatives worth approximately $50 billion are cleared on crypto exchanges daily. As a result, the firm believes that the daily crypto activity might be at least $100 billion, nearly a fifth of U.S. stocks.

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Source: Glassnode

As Bitcoin continues ranging between the $19K and $20K zone, volatility has slipped to the lowest level this year.

Nevertheless, Cumberland suggested that the slashed volatility does not show a lack of interest in the crypto space because an analysis of such magnitude “is deeply problematic,” given that it “obfuscates the critical difference between trading volumes and price volatility.” 

The firm added:

“Recent volatility-driven concerns about the health of the crypto space likely stem from comparisons to the bear market of 2018, when volumes were dire. This time is different.”

BTC volatility?

With Bitcoin volatility levels grinding to yearly lows, a surge might be on the horizon, according to Glassnode.

The market insight provider explained:

“The Bitcoin market is primed for a burst of volatility, with both realized and options implied volatility falling to historical lows. Futures open interest has hit all-time-highs, despite liquidations being at all-time-lows.”

There are also indicators that BTC volatility might explode, given that daily Bollinger Bands (BB) continue to tighten.

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Source: MatthewHyland

Meanwhile, Caue Oliveira, the lead on-chain analyst at BlockTrends, recently noted that BTC might be gearing towards a significant movement because traders are eager for some change, Blockchain.News reported. 

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Bitcoin Needs to Continue Standing above $19,200 to Dilute Downward Pressure, Analyst Says

by Blockchain News

Bitcoin (BTC) has gained momentum to surge past $19K after dropping to lows of $18.3K after the U.S. inflation data was released on October 13.

Market analyst Ali Martinez believes the leading cryptocurrency should stay above $19,200 to reduce selling pressure because this is a significant level. He pointed out:

“Roughly 2.5 million addresses bought nearly 1.5 million BTC at $19,200. The longer Bitcoin continues trading below $19,000, the higher the pressure these investors will feel to exit their long BTC positions to cut losses short. Consequently accelerating the downward pressure.”

The United States Bureau of Labor Statistics (BLS) published the latest inflation figures with the Consumer Price Index (CPI) for all urban consumers growing by 0.4% in September, Blockchain.News reported.  

As a result, a broad market reaction emerged, sending shivers down the crypto market, with Bitcoin dropping to lows of $18,319. 

Crypto insight provider Santiment stated:

“Thursday has been an expectedly volatile day after inflation data was released. Bitcoin dropped to $18.3k, its lowest price level since September 21st. However, as traders were in the midst of stopping the bleeding, BTC & the SP500 rapidly recovered.”

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Source: Santiment

Even though Bitcoin’s social dominance has dropped based on the back-and-forth experienced in the market, the leading cryptocurrency was up by 3.38% in the last 24 hours to hit $19,623 during intraday trading, according to CoinMarketCap.

Since some traders have been eyeing short-term pumps, this has also caused BTC’s social dominance to decrease. Santiment explained:

“Traders are chasing short-term pumps right now to salvage losses. Weak hands dropped out of crypto in 2022, & long-term traders are waiting for Bitcoin to begin receiving the spotlight again. When BTC social dominance is high, prices typically rise.”

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Source: Santiment

The U.S. Federal System has resorted to interest rate hikes to tame runaway inflation, which has been detrimental to the crypto market. With the latest CPI data being higher than expected, it remains to be seen what move the Fed will take next month. 

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Institutional Investors are not Yet Buying Bitcoin as Price Slips Below $20K

by Blockchain News

After enjoying notable momentum above $20,000, Bitcoin (BTC) slipped below this psychological price amid low appetite from institutional investors. 

Market insight provider CryptoQuant pointed out:

“Institutional investors not yet buying BTC. If prices rose without buying by Institutional investors before the FOMC rate announcement in November, it is likely to lose its upward momentum and dump it.”

Bitcoin was hovering around $19,494 during intraday trading, according to CoinMarketCap.

 

This price drop emerged as the United States recorded the slowest month of hiring in 18 months, indicating the hot job market was cooling slightly as the Federal Reserve tried to fight runaway inflation with inflation hikes. 

 

Marcus Sotiriou, a GlobalBlock analyst, stated::

“The jobs report was bearish for crypto and stocks, as the data came in hotter than expected.”

Sotiriou added that the consumer price index (CPI) data expected next week would shed light on the move that the Federal Reserve (Fed) would take with regard to interest rate.

 

The Fed has been at the forefront of interest rate hikes, which have been detrimental to the crypto market as bears continue to bite. 

 

Since June this year, the Fed has adopted the strategy of increasing interest rates by 75 basis points (bps), a scenario last seen in 1994.

 

Nevertheless, the United Nations Conference on Trade and Development (UNCTAD) recently warned the Federal Reserve not to throw caution to the wind based on its continuous monetary policy tightening because this could trigger a global recession, Blockchain.News reported. 

 

Bitcoin has lacked the significant bullish momentum needed to drive it past the lower $20K zone and the tightened macroeconomic factors have been speculated as the root cause. 

 

Katie Stockton, the founder of Fairlead Strategies LLC., noted:

“I think we need to respect the downtrend and assume that the bear-market cycle is still dominant.”

Meanwhile, Bitcoin hodlers have not shown signs of relenting in their quest to have more coins because more than 42 million addresses hold BTC despite the bear market. This is 4.5 million more than in 2021; data analytic firm IntoTheBlock pointed out. 

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To Avoid a Global Recession the Fed Should Ease Interest Rate Hikes – UN Report

by Blockchain News

Caution should not be thrown to the wind when it comes to tightening fiscal and monetary policies because this could trigger a global recession, according to a UN agency report.

The Trade and Development Report 2022 by the United Nations Conference on Trade and Development (UNCTAD) highlighted:

“The world is headed towards a global recession and prolonged stagnation unless we quickly change the current policy course of monetary and fiscal tightening in advanced economies.”

The Federal Reserve (Fed) has been setting the ball rolling in terms of interest rate hikes, which have been detrimental to the crypto market as bears continue to bite. 

 

Since June this year, the Fed has adopted the strategy of increasing interest rates by 75 basis points (bps), a scenario last seen in 1994.

 

Market analyst Michael van de Poppe recently pointed out that the situation had become dire to the extent that the crypto market is positively skewed towards the decisions made at the federal open market committee (FOMC) meetings.

 

Sam Bankman-Fried, the CEO of crypto exchange FTX, also noted that despite the federal reserve being caught between a rock and a hard place, it was driving the current crypto downturn because both markets and people were scared.

 

Therefore, the interest rate hike trend has made UNCTAD concerned since tightened macroeconomic conditions affect the most vulnerable. Per the report:

“All regions will be affected, but alarm bells are ringing most for developing countries, many of which are edging closer to debt default.”

UNCTAD stated that raising interest rates sharply would make life harder for heavily indebted governments, households, and firms. Moreover, growth would be slashed altogether.

 

“There is still time to step back from the edge of recession. The current course of action is hurting the most vulnerable. This is a matter of policy choices and political will,” UNCTAD Secretary-General Rebeca Grynspan added. 

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Assets Belonging to Troubled Crypto Lender Celsius to go Under the Hammer

by Blockchain News

Celsius Network Ltd, a troubled and bankrupt crypto lender, has disclosed the auction dates for its assets.

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Based on a filing with the US Bankruptcy Court for the Southern District of New York, the deadline for the final bid has been slated for October 17, but if need be it will be pushed to October 20. 

 

The filing added:

“A sale hearing will be held on Nov. 1 at 11 a.m. before Chief US Bankruptcy Judge Martin Glenn via Zoom.”

Celsius recently revealed that it was not planning to ask its debtors to pay their outstanding loans during its Chapter 11 bankruptcy proceedings, Blockchain.News reported.

 

Founded in 2017, Celsius gave interest-bearing products to cryptocurrency owners who deposited their funds, with returns going as high as 18.6% annually. In turn, the firm would lend out cryptocurrencies to gain profits. 

 

The rain started beating the firm because it took more risk than it could handle, according to a Wall Street Journal (WSJ) report. Celsius had a total asset base of $19 billion, but its equity contribution was pegged at just $1 billion. 

 

The WSJ made the analogy that the company’s Asset-to-Equity ratio was more than double the average for all the North American banks in the S&P 1500 Composite index, which is close to 9:1.

 

Therefore, Celsius has been one of the significant crypto players that have gone down the drain amid this year’s market meltdown. Others include crypto lender Voyager Digital Ltd. and hedge fund Three Arrows Capital.

 

The native tokens of Terraform Labs, Luna, and UST stablecoin, have also crashed with the company’s founder Do Kwon still at large despite making claims that he is not in hiding.  

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Bitcoin’s Social Dominance Hits 2-Months High

by Blockchain News

Interest in Bitcoin (BTC) spiked on social platforms over the weekend, leading to its social dominance surging, according to Santiment.

The crypto insight provider explained:

“A spike in Bitcoin interest on social platforms came this weekend. Among crypto’s top 100 assets, BTC is the topic in 26%+ of discussions for the first time since mid-July. Our back testing shows 20%+ dedicated to Bitcoin is a positive for the sector.”

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Source: Santiment

Therefore, the renewed Bitcoin interest is happening amid the top cryptocurrency trading below the psychological price of $20,000. BTC was hovering around $19,038 during intraday trading, according to CoinMarketCap.

Furthermore, Bitcoin has been trading much below its all-time high (ATH) of $69,000 set in November last year. The bearish momentum spread over the year in 2022, one of the factors triggered by like interest rate hikes from the Federal Reserve (Fed).

Interest rate surges usually have bearish impacts on high-risk assets like Bitcoin. For instance, Bitcoin (BTC) sank to $18.5K on September 19 based on global monetary tightening concerns, Blockchain.News reported. 

On the other hand, BTC’s average long-term trading returns continue trending at historic low levels. Santiment pointed out:

“Bitcoin remains -72% from its November, 2021 all-time-high. With such a market cap drop, active traders that have transacted over the past year are down an average of -43%. Historically, MVRV hasn’t dropped much further than this before a rebound.”

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Source: Santiment

Furthermore, key Bitcoin whale addresses have depleted their holdings to levels last seen in  April 2020. 

Santiment acknowledged:

“The amount of Bitcoin held by whales has been dropping for 11 months now. As fears of inflation and a world recession continue, addresses holding 100 to 10k BTC have lowered their percentage of supply held of crypto’s top asset to 29-month lows.”

With the number of non-zero BTC addresses reaching a monthly high, it remains to be seen how the leading cryptocurrency plays out in the short term as more participants continue entering the market. 

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Bitcoin Hodlers Remain Steadfast, Coins Aged over 3 months Hit ATH of 86.3%

by Blockchain News

Bitcoin lacked a significant upward momentum, but this has not dampened the spirits of hodlers because coins aged at least 3 months hit an ATH of 86.3%, according to Glassnode.

Based on BTC Realized Cap HODL Wave, the market insight provider pointed out:

“Coins aged 3m+ now account for an ATH of 86.3% of all USD wealth held by the BTC supply. Bitcoin hodlers appear to be steadfast and unwavering in their conviction.”

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Source: Glassnode

Glassnode added:

“The total volume of Bitcoin coin-days destroyed in the last 90-days has, effectively, reached an all-time-low. This indicates that coins which have been hodled for several months to years are the most dormant they have ever been.”

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Source: Glassnode

Hodling is among the favoured strategies in the crypto scene because coins are held for future purposes other than speculation. Glassnode stated:

“Number of BTC addresses holding 0.1+ Coins just reached an ATH of 3,824,449. Previous ATH of 3,824,379 was observed on 25 September 2022.”

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Source: Glassnode

Therefore, BTC hodlers are not relenting in their conviction despite the top cryptocurrency trading on shaky grounds based on factors like tightened macroeconomic conditions. 

Bitcoin was hovering around $18,895 during intraday trading, according to CoinMarketCap. 

Meanwhile, Michael Saylor, the co-founder of MicroStrategy, recently opined that Bitcoin was 100x better than gold despite the market drawdown. He, therefore, expected BTC to emerge as the next big store of value. 

“I think that the next logical step for Bitcoin is to replace gold as a non-sovereign store of value asset, and gold is a $10 trillion asset as we speak. Bitcoin is digital gold; it’s 100x better than gold,” Saylor said.

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Bitcoin (BTC) $ 37,808.13 1.52%
Ethereum (ETH) $ 2,049.44 1.10%
Litecoin (LTC) $ 69.69 0.64%
Bitcoin Cash (BCH) $ 223.13 0.11%