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good morning. Here’s what happens:
Market moves: Bitcoin led the cryptocurrency’s small recovery from last week’s heavy selling, but spot volume remained subdued over the weekend.
Technical Takes: Bitcoin’s upside is limited as long-term technical indicators have turned negative.
Watch the latest episodes From CoinDesk TV For insightful interviews with crypto industry leaders and analysis.
Bitcoin (BTC): $41,845 + 0.1%
Ether (ETH): $3,154 + 2.0%
Standard & Poor’s 500: $4,677 – 0.4%
DJIA: $36,231 – 0.01%
Nasdaq: $14.935 – 0.9%
Gold: 1796 USD + 0.2%
Bitcoin crossed the $42,000 level over the weekend, after a massive market bloodbath last week, which sent the No. 1 cryptocurrency up by market capitalization towards $40,000 from around $48,000. At press time, ether and most altcoins in CoinDesk’s top 20 coins by market capitalization are up significantly, although they remain low over the past week.
Bitcoin and most other cryptocurrencies fell last week amid the Federal Reserve’s release of the minutes from its December meeting. The Fed has indicated that it will tighten monetary policy faster than previously expected.
The leading cryptocurrency fell to $4,0505.3 on Coinbase on Saturday, its lowest since September 21, before rebounding above $42,000, according to data from TradingView and Coinbase.
But as markets open in Asia, it remains uncertain whether the recovery will continue as the spot volume of bitcoin across major central exchanges on Sunday was thin, according to data compiled by CoinDesk.
Bitcoin tumbled for six straight days ahead of the weekend and the downward movement escalated after the Federal Reserve’s minutes showed that policy makers discussed steep increases in interest rates and a faster pace of normalization of its balance sheet.
The minutes confirmed a strong hawkish bias with markets now pricing in 90% the chance of getting the Fed [rate] Singapore-based quantitative trading firm QCB Capital wrote on its Telegram channel on Sunday. “…in the bigger picture, it seems likely that all-time highs for BTC and ETH will remain limited for most of 2022 as a result of central bank tightening.”
Bitcoin oversold in a downtrend; Resistance at $45K
Bitcoin (BTC) is still in a 2-month long downtrend, defined by a series of lower price spikes.
The cryptocurrency is down around 9% over the past week as the bullish momentum continues to slow.
There is a slight support around $40,000, which may stabilize the current decline. However, the upside appears limited around the $45,000 resistance level. This means that buyers can quickly take profits in the event of a rebound in the price.
The Relative Strength Index (RSI) on the daily chart is most oversold since December 11th, albeit within a downtrend for the price.
In the long-term, BTC is vulnerable to further selling, especially if buyers fail to hold the $38,000-$40,000 support area over the weekend. On the weekly chart, the RSI is not yet oversold, indicating that the downtrend remains intact.
The support drop is around $28,000, which is close to the June 2021 low.
BTC is about two weeks away from recording a negative exhaustion signal, which usually precedes a price reversal in the opposite direction. However, similar oversold readings on the daily chart have been delayed as buyers remain on the sidelines.
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In case you missed it, here are the latest episodes of “First Mover” on CoinDesk TV:
US economy added fewer jobs in December than expected, Paul Brody on why he thinks 2022 is the year of Ethereum and more
The hosts of “First Mover” spoke with Ernst & Young Director and Global Innovation Leader Paul Brody about his outlook on Ethereum in 2022 and some of the key issues that need to be addressed. Looking at the markets, the US economy added 199,000 jobs last month, less than expected. Ben McMillan, CIO of IDX Digital Assets, shared his view on the crypto markets and the impact of macro factors. Additionally, Open Earth Foundation Executive Director Martin Weinstein shared ideas on using NFT art to help tackle climate change.
India’s central bank set up fintech division in light of challenges posed by cryptocurrency, CBDC is growing: According to an internal document seen by CoinDesk, the upgrade of the unit to its own division aims to boost innovation in the sector.
Industry body for Indian start-ups seeks crypto rules in Parliament’s upcoming budget session: The development comes a few days after it was reported that tax agencies “inspected” the offices of five major cryptocurrency exchanges in the country and “recovered” more than 84 crore ($11 million).
Binance.US is building an office in the Solana Metaverse: Many crypto companies set up shop in portals.
PayPal is exploring creating its own stablecoin as the crypto business grows: The code hidden in the company’s iPhone app shows that a potential “PayPal Coin” currency will be backed by US dollars.
Bitcoin drops towards $40K, driving longest losing streak since 2018: Cryptocurrency analysts have warned of the potential for a sharper selloff, and traders are now wondering when and where the market turmoil might end.
JPMorgan sees more crypto adoption in 2022, discussing Bitcoin’s position as a store of value: The investment bank is also continuing to designate the crypto exchange Coinbase as a buy.
The inside story of how cryptocurrency exchanges in India are ‘inspected’ by tax agencies: Two agencies, five months, five crypto exchanges, more than 100 employees and more than 700 million rupees in tax refunds, yet the extent of the misdemeanour, exempt from “mystery”, remains unknown.
Today’s coding explanation: Ethereum Contract and Clients: A Complete Guide
Other sounds: Silicon Valley’s New Get-rich-quick Job: Crypto Startups (New York times)
said and heard
“Even more than stocks, Warren Buffett’s timeless advice applies: Be fearful when others are greedy, and greedy when others are afraid.” (CoinDesk columnist David Morris)... “I look at the DAO space and certainly I can see how codes, governance systems, cross-border relationships, and unreliable relationships can help implement perfectly legitimate causes (like ConstitutionDAO). I also think this might be the right path towards more complex and possibly legally self-sufficient constructions. But we haven’t gotten there yet. (Cristina Karaskosa, CEO of ATH21 in a CoinDesk op-ed) … “Policy makers must consider three facts holistically. One is that climate change will not go away. Another is that Bitcoin is not going away. And third is that neutral miners are Geographically in Bitcoin they are highly adaptable and will continue to search for the most cost-effective sources of energy anywhere and anyway.” (Michael Casey, Head of Content at CoinDesk)