Decentral Block Post

Crypto and stock markets are usually forward-looking. Meaning, traders tend to ignore the near-term negatives and focus on the positives down the line. With Bitcoin’s (BTC) next halving in 2024, analysts are shifting their attention to this event.

Independent market analyst Rekt Capital highlighted this unique market dynamic in 2015 and 2019, a year before halving, Bitcoin rallied 234% and 316% respectively. If history repeats itself, Bitcoin’s price action may spring a surprise in 2023.

However, the near term remains uncertain and the Consumer Price Index (CPI) data on Jan. 12 may lead to a sharp uptick in volatility.

Some analysts are skeptical of the growing dominance of altcoin trading volume, which is above 50%. According to CryptoQuant contributor Maartunn, the altcoin dominance warns of “a potential risk for further downside.”

One event that is being closely tracked is the crisis brewing at the Digital Currency Group (DCG). Galaxy Digital Holdings CEO Mike Novogratz, in an interview with CNBC on Jan. 10, said that the DCG, Genesis and Gemini overhang could “play out in the next quarter” Though it is “not going to be great,” Novogratz does not believe it will trigger “a lot of selling.”

Bitcoin (BTC) price jumped to $17,500 on Jan. 11, driving it to its highest level in three weeks. The price move gave bulls control of the $275 million BTC weekly options expiry on Jan. 13 because bears had placed bets at $16,500 and lower. 

The recent move has perma-bulls and dip buyers calling a market bottom and potential end to the bear market but what does the data actually show?

Is the Bitcoin bear market over?

It might seem too pessimistic to say right now, but Bitcoin did trade below the $16,500 level on Dec. 30 and those bearish bets are unlikely to pay off as the options deadline approaches.

Investors' main hope is the possibility of the U.S. Federal Reserve halting its interest rate increase in the first quarter of 2023. The Consumer Price Index (CPI) inflation report will be released on Jan. 12 and it might give a hint on whether the central bank’s effort to slow the economy and bring down inflation is achieving its expected results.

Meanwhile, crypto traders fear that an eventual downturn in the traditional markets could cause Bitcoin to retest the $15,500 low. For instance, Morgan Stanley's CIO and chief U.S. equity strategist, Mike Wilson, told investors on CNBC to brace for a winter downdraft and warned that the S&P 500 index is vulnerable to a 23% drop to 3,000. Wilson added: "Even though a majority of institutional clients think we're probably going to be in a recession, they don't seem to be afraid of it. That's just a big disconnect."

Ethereum price (ETH) gained 10.2% from Jan. 4 to Jan. 10, breaching the $1,300 resistance without much effort, but has the Ether price move cast a light on whether the altcoin is ready to begin a new uptrend.

Will Ethereum’s former resistance level turn to support?

After testing the $1,200 support on Jan. 1, the eight-week ascending channel has displayed strength, but Ether bulls fear that negative newsflow might break the pattern to the downside.

Despite the positive price trend, the sentiment around Ethereum and other cryptocurrencies hasn't been very enticing. For example, on Jan. 8, Xiao Yi, the former Chinese Communist Party secretary of Fuzhou, confessed to "acting recklessly" in support of crypto mining. Xiao seemed to speak from what appeared to be a prison, apologizing for causing "grave losses" to the Fuzhou region.

On Jan. 10, South Korean tax agents reportedly raided Bithumb's exchange offices to explore a potential tax evasion case. On Dec. 30, Park Mo — an executive at Bithumb's parent company — was found dead, though he was under investigation for embezzlement and stock price manipulation.

This week (Jan. 10), Cameron Winklevoss, the co-founder of the Gemini exchange, issued an open letter to Barry Silbert, CEO of Digital Currency Group (DCG). In the letter Winklevoss makes some serious fraud accusations and requests that the Grayscale fund management holding company dismiss Silbert to provide a resolution for Gemini's Earn users.

The price of Ethereum’s native cryptocurrency, Ether (ETH), gained 10.2% from Jan. 4 to Jan. 10, breaching the $1,300 resistance without much effort. But has the Ether price move cast a light on whether the altcoin is ready to begin a new uptrend?

Will Ether’s former resistance level turn to support?

After testing the $1,200 support on Jan. 1, the eight-week ascending channel has displayed strength, but Ether bulls fear that negative newsflow might break the pattern to the downside.

Despite the positive price trend, the sentiment around Ether and other cryptocurrencies hasn’t been very enticing. For example, Xiao Yi, the former Chinese Communist Party secretary of Fuzhou, confessed on Jan. 8 to “acting recklessly” in support of crypto mining. Xiao spoke from what appeared to be a prison, apologizing for causing “grave losses” to the Fuzhou region.

On Jan. 10, South Korean tax agents reportedly raided crypto exchange Bithumb’s offices to explore a potential tax evasion case. On Dec. 30, Park Mo — an executive at Bithumb’s parent company — was found dead, though he was under investigation for embezzlement and stock price manipulation.

Also on Jan. 10, Cameron Winklevoss, co-founder of the Gemini exchange, issued an open letter to Barry Silbert, CEO of Digital Currency Group. In the letter, Winklevoss makes some serious fraud accusations and requests that the Grayscale fund management holding company dismiss Silbert to provide a resolution for Gemini’s Earn users.

Bitcoin (BTC) is facing a “bottoming candle” in 2023, but BTC price action is still more than able to surprise the market.

In a tweet on Jan. 11, popular trader and analyst Rekt Capital predicted that BTC/USD could see “decent upside” this year.

Chart teases serious Bitcoin upside potential

Analyzing Bitcoin’s four-year market cycles around block subsidy halving events, Rekt Capital drew attention to 2023 being the deadline for its next “bottoming candle.”

With the next halving due in 2024, the coming 12 months should see a price floor, followed by a rally as the event draws nearer.

2024 thus forms the fourth candle in Bitcoin’s current cycle, and 2023 the third.

Solana (SOL) price is up an impressive 60% since the new year, partially boosted by hype surrounding meme cryptocurrency Bonk (BONK). However, the SOL/USD pair now shows signs of exhaustion, raising anticipations that the token may see a short-term correction in the coming days.

Solana turns overbought

Solana is one of the best performing cryptocurrencies so far in 2023 after being one of the biggest losers in 2022. 

On Jan. 9, SOL's price jumped to as high as $19.50, or around 120% gains in a recovery rally after sliding below $8 on Dec. 29, 2022.

But the price spik also turned Solana into an overbought asset, per its daily relative strength index (RSI) reading above 70, as shown below.

Traditional investors typically see an overbought RSI as a potential sell signal, given the indicator has historically coincided with a period of buyer exhaustion. As a result, SOL's price could enter a correction or a sideways consolidation stage to bring back its RSI below 70.