Technical analysis of major crypto currencies, December 19 -25
Last week in the news
The pivotal point for financial markets during the previous week were moves from central bankers to fight inflation, where fears of forthcoming recession were shaping week-end investors' confidence. Both EU and US markets were closed in red. The crypto market also ended the week with negative sentiment. Bitcoin is ending the week modestly above $16K, and Ether above $1.1K.
Previous week was under the impact of both release of the US inflation data, and December`s FOMC meeting. Positive news for financial markets came on Tuesday, when official data showed a slowdown in US inflation data, with yearly inflation rate of 7.1% in November, down from 7.7% posted previously. This was a certain sign for financial markets that the FED will slow down its further interest rate increases. Wednesday was a FOMC day when members increased further rates by 50bps, however, in a statement after the meeting, FED Chair Powell said a few things which were not welcomed by investors. Most important news is that the US economy is certainly entering into recession, which might last through the year 2023. First half of the week was marked with investor`s optimism, while week-end was in a bit pessimistic mood as FED decreased market expectations on “soft landing” of the economy. During the same week the European, Swiss and UK central banks also increased their reference interest rates.
Even after a month of the FTX scandal, the dust over contingencies is still not settling. Previous week, the crypto exchanger Binance was in the news spotlight as one of the first investors in the fallen exchanger FTX. FTX bankruptcy proceedings showed that last year Binance sold its equity possessions in FTX, receiving about $2.1 billion. In an interview with CNBC, the CEO of Binance, Zhao Changpeng, tried to calm down the public, noting that the company's financials are in order, and that there are no more ties with FTX. Negative news triggered clients funds outflows, increasing daily withdrawals to $1.14 billion on Tuesday. At the same time, a spokesperson from Binance said that the company managed to go through a stressful time because they keep clients' funds in custody.
The annual report of the Treasury`s Financial Stability Oversight Council has been approved on Friday. Major points from this report are related to conclusion that latest fall of the FTX did not had any significant impact on US financial system. Another major topic was the Council's call for the US Congress to pass a bill by which it will be allowed to US official agencies to set the rules and dive deeper into the whole crypto industry, including the supervision of activities related to the cryptos. At the same time, they acknowledged that stablecoins represent less riskier types of cryptos.
The global regulator of banking industry, the Basel Committee on Banking Supervision, (BCBS) proposed banking rules for the crypto assets, by which it would be allowed for banks to hold up to 2% of capital in the crypto assets and non-fungible tokens, but it was recommended for this figures not to be higher from 1%. The new rules will be applicable starting from January 2025. On the other hand, bankers are commenting that this exposure is too low in order to support any further innovations through distributed ledger technology.
Crypto market cap
Although the previous week was promising one in expectation of the positive news that the inflation is finally over and that FED's monetary measures might finally ease, news regarding forthcoming recession put investors again into negative sentiment. Namely, in a speech after the FOMC meeting, Fed Chair Powell noted FED`s expectations that the unemployment will increase in Y2023 due to recession in the US. At the beginning of the week investors were thrilled on the possibility that the agony called inflation and monetary tightening might finally end, the recession news pushed the investors’ confidence again into the red zone. In addition to negative macroeconomic news, the crypto market continues to be under the influence of potential FTX contingencies. The crypto market also finished the week in red, decreasing its total capitalization by additional $50B, or by 6% on a weekly basis, led by ETH and BNB. Daily trading volumes remained at lower levels, moving above $70B on a daily basis. Investors continue to be on hold. Total funds outflow from the beginning of this year dropped further to the level of $1.490B, which is a decrease of 65% on a yearly basis.
Although the previous week started in a positive manner, still week –end brought some negative sentiment on the crypto market, decreasing total market cap by 6%. This drop was led by major altcoins, ETH, DOGE and BNB, while BTC managed to remain flat compared to the week before. ETH had another significant drop in market cap by 7% where the coin lost even $11B in value. ETH was followed by BNB, which decreased total capitalization by more than $8B or 18%, after negative news regarding Binance potential exposure toward FTX exchange. DOGE was another major altcoin with a pretty negative weekly performance of minus $2.5B in market cap, or a drop of almost 20% in value. All other altcoins finished the week in red, where the most significant drop in relative terms had Filecoin, with a drop of 30% in value, IOTA was traded down by 19%, ADA also had a drop of 15%. Regardless of a drop in value, Filecoin continued its year’s rally in total coins in circulation, adding more than 2% during the previous week.
Crypto futures market
It was a pretty bumpy week on the crypto futures market, but regardless of small drop in both BTC and ETH short term futures prices, the futures curve managed to change its slope after several months in its inversion. It points to market expectations on the probability that the crypto market has reached its bottom line and that future periods might bring some moves in a positive direction. Although it is still early to confirm such a statement, considering that there is still quite a small price difference between different futures maturities, it could be perceived as at least some positive market feedback regarding current expectations.
In line with the spot market developments, BTC short term futures were traded by more than 2% lower from the week before. ETH short term futures had a higher drop of some 5% on a weekly basis, with the price falling below $1.2K. On the other side, both BTC and ETH longer term futures were traded higher by more than 1% , where BTC futures for the end of year 2023 were still holding above $17K, while ETH futures for the same period traded above $1.2K.
The pivotal point for financial markets during the previous week were moves from central bankers to fight inflation, where fears of forthcoming recession were shaping week-end investors' confidence. Both EU and US markets were closed in red. The crypto market also ended the week with negative sentiment. Bitcoin is ending the week modestly above $16K, and Ether above $1.1K.
Previous week was under the impact of both release of the US inflation data, and December`s FOMC meeting. Positive news for financial markets came on Tuesday, when official data showed a slowdown in US inflation data, with yearly inflation rate of 7.1% in November, down from 7.7% posted previously. This was a certain sign for financial markets that the FED will slow down its further interest rate increases. Wednesday was a FOMC day when members increased further rates by 50bps, however, in a statement after the meeting, FED Chair Powell said a few things which were not welcomed by investors. Most important news is that the US economy is certainly entering into recession, which might last through the year 2023. First half of the week was marked with investor`s optimism, while week-end was in a bit pessimistic mood as FED decreased market expectations on “soft landing” of the economy. During the same week the European, Swiss and UK central banks also increased their reference interest rates.
Even after a month of the FTX scandal, the dust over contingencies is still not settling. Previous week, the crypto exchanger Binance was in the news spotlight as one of the first investors in the fallen exchanger FTX. FTX bankruptcy proceedings showed that last year Binance sold its equity possessions in FTX, receiving about $2.1 billion. In an interview with CNBC, the CEO of Binance, Zhao Changpeng, tried to calm down the public, noting that the company's financials are in order, and that there are no more ties with FTX. Negative news triggered clients funds outflows, increasing daily withdrawals to $1.14 billion on Tuesday. At the same time, a spokesperson from Binance said that the company managed to go through a stressful time because they keep clients' funds in custody.
The annual report of the Treasury`s Financial Stability Oversight Council has been approved on Friday. Major points from this report are related to conclusion that latest fall of the FTX did not had any significant impact on US financial system. Another major topic was the Council's call for the US Congress to pass a bill by which it will be allowed to US official agencies to set the rules and dive deeper into the whole crypto industry, including the supervision of activities related to the cryptos. At the same time, they acknowledged that stablecoins represent less riskier types of cryptos.
The global regulator of banking industry, the Basel Committee on Banking Supervision, (BCBS) proposed banking rules for the crypto assets, by which it would be allowed for banks to hold up to 2% of capital in the crypto assets and non-fungible tokens, but it was recommended for this figures not to be higher from 1%. The new rules will be applicable starting from January 2025. On the other hand, bankers are commenting that this exposure is too low in order to support any further innovations through distributed ledger technology.
Crypto market cap
Although the previous week was promising one in expectation of the positive news that the inflation is finally over and that FED's monetary measures might finally ease, news regarding forthcoming recession put investors again into negative sentiment. Namely, in a speech after the FOMC meeting, Fed Chair Powell noted FED`s expectations that the unemployment will increase in Y2023 due to recession in the US. At the beginning of the week investors were thrilled on the possibility that the agony called inflation and monetary tightening might finally end, the recession news pushed the investors’ confidence again into the red zone. In addition to negative macroeconomic news, the crypto market continues to be under the influence of potential FTX contingencies. The crypto market also finished the week in red, decreasing its total capitalization by additional $50B, or by 6% on a weekly basis, led by ETH and BNB. Daily trading volumes remained at lower levels, moving above $70B on a daily basis. Investors continue to be on hold. Total funds outflow from the beginning of this year dropped further to the level of $1.490B, which is a decrease of 65% on a yearly basis.
Although the previous week started in a positive manner, still week –end brought some negative sentiment on the crypto market, decreasing total market cap by 6%. This drop was led by major altcoins, ETH, DOGE and BNB, while BTC managed to remain flat compared to the week before. ETH had another significant drop in market cap by 7% where the coin lost even $11B in value. ETH was followed by BNB, which decreased total capitalization by more than $8B or 18%, after negative news regarding Binance potential exposure toward FTX exchange. DOGE was another major altcoin with a pretty negative weekly performance of minus $2.5B in market cap, or a drop of almost 20% in value. All other altcoins finished the week in red, where the most significant drop in relative terms had Filecoin, with a drop of 30% in value, IOTA was traded down by 19%, ADA also had a drop of 15%. Regardless of a drop in value, Filecoin continued its year’s rally in total coins in circulation, adding more than 2% during the previous week.
Crypto futures market
It was a pretty bumpy week on the crypto futures market, but regardless of small drop in both BTC and ETH short term futures prices, the futures curve managed to change its slope after several months in its inversion. It points to market expectations on the probability that the crypto market has reached its bottom line and that future periods might bring some moves in a positive direction. Although it is still early to confirm such a statement, considering that there is still quite a small price difference between different futures maturities, it could be perceived as at least some positive market feedback regarding current expectations.
In line with the spot market developments, BTC short term futures were traded by more than 2% lower from the week before. ETH short term futures had a higher drop of some 5% on a weekly basis, with the price falling below $1.2K. On the other side, both BTC and ETH longer term futures were traded higher by more than 1% , where BTC futures for the end of year 2023 were still holding above $17K, while ETH futures for the same period traded above $1.2K.
