Weekly Crypto Market Report: Jan 24-30, 2022 - BTC, ETH, MANA, LINK & More

Market Fundamentals Analysis

The crypto market climbed into positive territory earlier last week after a rough start to the new year. After BTC fell to a seven-month low,  it started the week off strong, when it showed an 8.67% recovery last Tuesday and closed above C$48k. Since then, Bitcoin has witnessed a small uptick of about 5% week on week and has been trading around the C$44,000-C$48,000 range over the past day or two. BTC dominance has improved and currently stands at 42%. At current levels, the asset does seem to look quite attractive, which is why to anticipate volumes and inflows to improve here on.

As for ETH, it fell ~50% from its record high in November but has made a sharp turnaround, rising 9.73% and currently trading around C$3,250. BTC rallied 5% since Friday, with ETH adding about 10%; ETH was an outperformer over the weekend though, with most alts more in-line with BTC. ETH has been trading in the range of C$3,150-C$3,395 over the past couple of days, and its dominance is currently at 18%. We remain cautious over the next couple of days, to determine if a relief rally is in the works or not.

In a surprising new twist last week, The Russian Ministry of Finance submitted a crypto regulatory framework for review this morning, acting in direct opposition to the Central Bank of Russia which has been calling for a full-on ban of crypto trading and mining within the country. This proposal to the government by the Ministry of Finance states that crypto can be integrated within the traditional banking infrastructure, with regulation providing a route for increased tax revenue on crypto holdings and giving the authorities better guidance on monitoring and prosecuting illegal activities.  

At the time of writing this, Russian citizens hold crypto worth in excess of 2 trillion Russian Rubles (~$25.7B USD), possibly indicating that a full-on ban would be too difficult to enforce and lead to a black market. In the US, most market participants expect more guidance on regulation before the end of 2022. An asset that has tumbled is Terra’s Luna token. Luna fell by about 25% as panic around MIM stablecoin increased. Currently, C$48.5 will act as a key support level for the asset.

The overall sentiment has been bearish this month, and it seems like this might stick amidst this new variant and hawkish macro trends. Markets were volatile, and the tussle between bears and bulls continued. In the month of February, we expect  BTC  to see attractive volumes and growth, as the fundamental outlook is positive.  Volumes have started to see a recovery as these levels do seem attractive, which is necessary for prices to improve. Along with BTC and ETH,  the majority of other altcoins also witnessed a similar trend, all falling in the range of 15-30% this month.

Lastly, we expect February to be a positive month and anticipate the upward trend to continue. Though volatility seems to be a given, fundamentally BTC and ETH, the largest assets by market cap, continue to hold a strong footing in the marketplace. Given that, we remain bullish on both BTC as well as ETH and feel positively towards altcoins, especially those operating in the DeFi ecosystem.

Weekly Snapshot

Market Updates

-          Flushing Financial Corporation, the parent company behind New York-based Flushing Bank, has partnered with crypto firm New York Digital Investment Group (NYDIG) to offer Bitcoin (BTC) services to its customers.

-         The United States Securities and Exchange Commission has disapproved asset manager Fidelity’s Wise Origin Bitcoin Trust spot exchange-traded fund (ETF) application.

-         The Russian Ministry of Finance submitted a crypto regulatory framework for review this morning, acting in direct opposition to the Central Bank of Russia which has been calling for a full-on ban of crypto trading and mining within the country.

-         The Securities and Exchange Commission is reportedly reviewing some of the high-yield crypto lending products offered by Gemini, Celsius Network and Voyager Digital.

-         NFT marketplace OpenSea has backflipped on a controversial decision to limit the number of NFTs and collections creators can mint using its smart contract.

Bitcoin Technical Analysis

Bears took the lead as Bitcoin faced multiple resistances (Descending Trendline & 20 Day Moving Average). BTC plunged almost by 29% this month making the low of C$41,600. Post this move, the asset is consolidating and trading in a range from C$44,000 to C$48,000 with declining volumes.

Technically,  on the daily time frame, we can see the series of candles with longer shadows and smaller bodies which indicates indecision in trend and there is no decisive pattern. Hence, we can expect more sideways movement until the range is broken on either side with good volumes. BTC has a strong support zone from C$37,500 to C$35,500 whereas C$50,500 to C$55,500 will act as a strong resistance zone. Falling Moving Average and RSI in the negative territory indicates that the bears have the upper hand. To witness a rally or a positive move BTC needs to trade and close above C$51,000.

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Disclaimer:

Information provided in the weekly market report is for information purposes only and should not be interpreted as investment, legal, or tax advice. Prior to investing, it is very important to evaluate your investment objectives and your risk tolerance carefully. This technical report is not meant to provide guarantees of future performance, and users should not rely on it, as the actual performance and financial results may differ significantly.