Technical analysis of major crypto currencies, January 9 – 15
Last week in the news
After a Holiday season, the financial markets started the New Year in a relaxed mode. During the first week of January “old market stories” continued to be in the spotlight of investors. Certainly, inflation is still on the top of the list. The US Dow index surged by 700 points during the first trading week, as investors are expecting for inflation to slow down further which would impact FED to halt monetary tightening. The crypto market remained relatively flat, with Bitcoin ending the week below $17K, and Ether below $1.3K.
Inflation was certainly the most popular word during the whole previous year on financial markets, while the second place, on the crypto market, could take the word lay-offs. Both words continue to be in the spotlight of the markets as fear of recession increases. The crypto winter on the crypto market is still on stage. Lay-offs in this industry (as well in many others) continued during the first week of January. Huobi, a Seychelles-based crypto exchanger, announced its decision to cut its labour force globally by 20%. Within the company this move was explained as “structural adjustment” during the bear market. At the same time, Genesis Trading, a part of Digital Currency Group, will cut an additional 30% of its staff, after firing 20% of employees during the last year. It is still unclear where exactly the problem lies with this company, but analysts agree that the main issues for Genesis Trading started after the collapse of the FTX exchanger. On the other hand, crypto exchanger Kraken stated that they will stop the company's operations on Japan`s markets, due to weak market conditions in this country.
The FTX scandal as of the end of the last year is still contingent on the market. The US regulators issued a warning for US banks on their exposures with cryptocurrencies. The regulators warned regarding risks like scams, fraud, and contagion risks originating from inter-connections among crypto market participants. Their conclusion is that any holdings of crypto assets on public or decentralised platforms by banks, could not be treated as sound banking practice.
Another contingent of the FTX scandal. Silvergate Capital was downgraded by the major US banks and rating agencies. Analysts agree that the strong funds outflow that this institution experienced after exposure of its connections with FTX, would have significant implications on the institution`s profitability in the long run, due to increased costs of liquidity and impairments of technology assets, as well as layoff programs. Bearish market trend for this company is confirmed also by Cathy Wood`s ARK Invest fund, which sold about $5M of Silvergate stocks. However, at the same time Cathy continues to bet on COIN as the fund bought additional $6M of COIN shares.
Crypto market cap
During the Holiday season, markets were traded in a relatively relaxed mode. There has not been too much volatility, however, daily trading volumes were relatively low, which is usual during this period of the year. The crypto market suffered crypto winter during the previous year and finished it with a total funds outflow of 65% y/y, with total outflow of $1.426B. First week of this year was relatively calm but market managed to increase market cap by 4%, adding modest $27B to its total capitalization. Daily trading volumes continue to be decreased, reaching $44B on a daily basis during the first week of January.
Regardless of low trading volumes, the start of this year was positive on the crypto market. Majority of coins gained during the week, both in market value and in circulating coins. Major coins on the market were traded in a relatively mixed manner. Bitcoin ended the first week relatively flat compared to the last week of December, however, Ether managed to gain additional $10B in market cap, which is an increase of 7%. Binance Coin also managed to erase some of the losses from the end of the year before, adding 10% to its market cap or almost $4B. Some of the coin with significant gains in relative terms were Ethereum Classic with a surge of 25%, Litecoin which added almost 19% to its market cap and Filecoin, which was up by 15%. It should be mentioned that Filecoin continued to strongly increase its coins in circulation, adding 4.8% since the end of the last year. Algorand also increased its circulating coins by 1.0%, along with Zcash and Solana, which both gained an additional 0.9% in coins in circulation.
Crypto futures market
Despite the optimistic new year`s start of the spot crypto market, the crypto futures market continues to be sceptical regarding the future prices of both BTC and ETH. In line with the spot market developments, short term futures for ETH were up by some 7%, while for BTC remained relatively flat. The maturity curve for both coins continues to be inverted, which was a trend started during the previous year. BTC futures maturing as of the end of this year were closed at $16.6K, while those maturing in December 2024 were holding around $16.5K. Situation is the same with ETH futures, which closed the week at $1.220 for maturities as of the end of this year, and at $1.200 for maturities as of the end of the next year.
After a Holiday season, the financial markets started the New Year in a relaxed mode. During the first week of January “old market stories” continued to be in the spotlight of investors. Certainly, inflation is still on the top of the list. The US Dow index surged by 700 points during the first trading week, as investors are expecting for inflation to slow down further which would impact FED to halt monetary tightening. The crypto market remained relatively flat, with Bitcoin ending the week below $17K, and Ether below $1.3K.
Inflation was certainly the most popular word during the whole previous year on financial markets, while the second place, on the crypto market, could take the word lay-offs. Both words continue to be in the spotlight of the markets as fear of recession increases. The crypto winter on the crypto market is still on stage. Lay-offs in this industry (as well in many others) continued during the first week of January. Huobi, a Seychelles-based crypto exchanger, announced its decision to cut its labour force globally by 20%. Within the company this move was explained as “structural adjustment” during the bear market. At the same time, Genesis Trading, a part of Digital Currency Group, will cut an additional 30% of its staff, after firing 20% of employees during the last year. It is still unclear where exactly the problem lies with this company, but analysts agree that the main issues for Genesis Trading started after the collapse of the FTX exchanger. On the other hand, crypto exchanger Kraken stated that they will stop the company's operations on Japan`s markets, due to weak market conditions in this country.
The FTX scandal as of the end of the last year is still contingent on the market. The US regulators issued a warning for US banks on their exposures with cryptocurrencies. The regulators warned regarding risks like scams, fraud, and contagion risks originating from inter-connections among crypto market participants. Their conclusion is that any holdings of crypto assets on public or decentralised platforms by banks, could not be treated as sound banking practice.
Another contingent of the FTX scandal. Silvergate Capital was downgraded by the major US banks and rating agencies. Analysts agree that the strong funds outflow that this institution experienced after exposure of its connections with FTX, would have significant implications on the institution`s profitability in the long run, due to increased costs of liquidity and impairments of technology assets, as well as layoff programs. Bearish market trend for this company is confirmed also by Cathy Wood`s ARK Invest fund, which sold about $5M of Silvergate stocks. However, at the same time Cathy continues to bet on COIN as the fund bought additional $6M of COIN shares.
Crypto market cap
During the Holiday season, markets were traded in a relatively relaxed mode. There has not been too much volatility, however, daily trading volumes were relatively low, which is usual during this period of the year. The crypto market suffered crypto winter during the previous year and finished it with a total funds outflow of 65% y/y, with total outflow of $1.426B. First week of this year was relatively calm but market managed to increase market cap by 4%, adding modest $27B to its total capitalization. Daily trading volumes continue to be decreased, reaching $44B on a daily basis during the first week of January.
Regardless of low trading volumes, the start of this year was positive on the crypto market. Majority of coins gained during the week, both in market value and in circulating coins. Major coins on the market were traded in a relatively mixed manner. Bitcoin ended the first week relatively flat compared to the last week of December, however, Ether managed to gain additional $10B in market cap, which is an increase of 7%. Binance Coin also managed to erase some of the losses from the end of the year before, adding 10% to its market cap or almost $4B. Some of the coin with significant gains in relative terms were Ethereum Classic with a surge of 25%, Litecoin which added almost 19% to its market cap and Filecoin, which was up by 15%. It should be mentioned that Filecoin continued to strongly increase its coins in circulation, adding 4.8% since the end of the last year. Algorand also increased its circulating coins by 1.0%, along with Zcash and Solana, which both gained an additional 0.9% in coins in circulation.
Crypto futures market
Despite the optimistic new year`s start of the spot crypto market, the crypto futures market continues to be sceptical regarding the future prices of both BTC and ETH. In line with the spot market developments, short term futures for ETH were up by some 7%, while for BTC remained relatively flat. The maturity curve for both coins continues to be inverted, which was a trend started during the previous year. BTC futures maturing as of the end of this year were closed at $16.6K, while those maturing in December 2024 were holding around $16.5K. Situation is the same with ETH futures, which closed the week at $1.220 for maturities as of the end of this year, and at $1.200 for maturities as of the end of the next year.
