Decentral Block Post

Traders might rejoice now that Bitcoin price ventured above $17,400, but twenty-seven long days have passed since Bitcoin (BTC) last breached the $17,250 resistance. 

On December 13, after a two-week-long lateral movement, Bitcoin posted a 6.5% rally toward $18,000 and even though the current movement still lacks strength, traders believe that a retest of the $18,250 resistance remains possible.

To start the week, the S&P 500 index rose to its highest level in twenty-six days on Jan. 9. Weak economic data had previously fueled investors' expectation of slower interest rate hikes by the U.S. Federal Reserve (FED) and the Jan. 12 Consumer Index Report (CPI) could lend some credence to this expectation.

On Jan. 6, German retail sales data showed a 5.9% year-on-year contraction took place in November. In the U.S., economic activity in the services sector contracted in December after 30 consecutive months of growth. The Services PMI reading was 49.6%, and readings below 50% typically point toward a weakening economy.

Investors anxiously wait for the Consumer Price Index (CPI) release on Jan. 12, which is more likely to dictate bets on whether the FED will raise interest rates by 0.25% or 0.50% in early February. Economists expect inflation to increase by 6.6% over the prior year in December, so a weaker-than-consensus CPI could further boost markets' performance.

Bitcoin (BTC) has finally pushed above the $17,000 mark after rallying to $17,375 on Jan. 12.  with both the bulls and the bears eyeing the Consumer Price Index (CPI) due on Jan. 12. If the print shows that inflation is cooling off, risk assets may rally, but a negative surprise could attract strong selling.

While some believe that a macro bottom could be forming in Bitcoin, others remain skeptical. They draw a parallel between the current bear market and the dot-com bubble burst. The United States Federal Reserve stopped raising rates in May 2000 but the Nasdaq did not bottom out for two more years. If the same scenario plays out with cryptocurrencies, then the next bull run may not start in a hurry.

However, one positive for the future of the crypto industry is that legacy finance companies continue to show interest in the space. Laser Digital co-founder and CEO Jez Mohideen believes that the arrival of traditional companies could help regulate the cryptocurrency sector.

Do the charts signal a rally in Bitcoin? What are the other altcoins that are showing a positive chart structure? Let’s find out.

BTC/USDT

Bitcoin has been trading above the moving averages since Jan. 4. This is the first indication that the selling pressure could be reducing. The price reached the overhead resistance at $17,061 on Jan. 6 but the bulls could not ascend this level. This indicates that the bears have not given up yet.

Ethereum's native token, Ether (ETH), rose to three-week highs, rallying in lockstep with the broader  cryptocurrency market, as well as stocks. 

ETH price rises to three-week highs

On Jan. 9, ETH's price rose 2.85% to cross above $1,325 for the first time in three weeks, a key level that could pave the token's path toward $1,350 next if its previous price performance is any indication.

The crypto market's capitalization gained 2.66%, or $21.18 billion, in the same period. 

Cooling inflation boosts Ethereum price

Investors are rushing into riskier markets on signs of cooling inflation.

Notably, on Jan. 6, the U.S. Labor Department's nonfarm payrolls report showed a slowdown in wage increases, which market watchers interpreted as a sign that the Federal Reserve's hawkish policy has brought down inflation successfully.

Bitcoin (BTC) starts a new week on a promising footing with BTC price action near one-month highs — can it last?

In a new year’s boost to bulls, BTC/USD is currently surfing levels not seen since mid-December, with the weekly close providing cause for optimism.

The move precedes a conspicuous macroeconomic week for crypto markets, with the December 2022 Consumer Price Index (CPI) print due from the United States.

Jerome Powell, Chair of the Federal Reserve, will also deliver a speech on the economy, with inflation on everyone’s radar.

Inside the crypto sphere, FTX contagion continues, with Digital Currency Group (DCG) at odds with institutional clients over its handling of solvency problems at subsidiary Genesis Trading.

Bitcoin (BTC) traded nearer $17,000 on Jan. 7 after the end of the year’s first trading week delivered a spike higher.

All eyes on CPI

Data from Cointelegraph Markets Pro and TradingView followed BTC/USD as it briefly passed the $17,000 mark the day prior.

The pair had seen flash volatility on the back of fresh economic data from the United States, this nonetheless fading to leave the key level “unflipped” as resistance.

Nonetheless, the brief uptick delivered Bitcoin’s highest price point since Dec. 20, 2022.

Reacting, market participants continued to look to next week’s Consumer Price Index (CPI) print as a key potential catalyst for risk assets.

Undoubtedly, 2022 was one of the worst years for Bitcoin (BTC) buyers, primarily because the asset’s price dropped by 65%. While there were some explicit reasons for the drop, such as the LUNA-UST crash in May and the FTX implosion in November, the most important reason was the U.S. Federal Reserve policy of tapering and raising interest rates.

Bitcoin’s price had dropped 50% from its peak to lows of $33,100 before the LUNA-UST crash, thanks to the Fed rate hikes. The first significant drop in Bitcoin’s price was due to growing market uncertainty around potential rate hike rumors in November 2021. By January 2022, the stock market had already started showing cracks due to the increasing pressure of imminent tapering, which also negatively impacted crypto prices.

Fast forward year, and the crypto market continues to face the same problem, where the headwinds from the Fed rate hikes have restricted substantial bullish moves. The worst part is that this regime may last much longer than the marketparticipants expect.

Clues emerge from the 1990s dot-com bubble

The dot-com bubble of 1999-2000 could teach investors a lot about the current crypto winter, and it continues to paint a grim picture for2023.

The tech-heavy Nasdaq Composite inflated to enormous levels by the early 2000s and this bubble burst when the Fed began raising interest rates in 1999 and 2000. As credit became more expensive, the amount of easy money shrank in the market, causing the Nasdaq to drop from its peak by 77%.

Bitcoin (BTC) flashed volatility at the Jan. 6 Wall Street open after fresh United States economic data disappointed risk-asset bulls.

Analyst: BTC price in line for $17,000 retest

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD dipping to $16,669 on Bitstamp around non-farm payrolls and unemployment figures.

Both those came in better than expected, with mixed implications for the Federal Reserve having room for maneuver when it comes to its continued tightening of monetary policy.

There may be some chance of relief for Bitcoin, crypto and the broader risk asset stage in the weeks and months to come, with interest rate hikes lessening in intensity.

"Expecting a test of $17k," on-chain analytics resource Material Indicators wrote in part of a reaction on social media.

Bitcoin (BTC) could be busy forming fundamental support in its current tight trading range, the latest research suggests.

In a tweet on Jan. 6, trading platform Trend Rider noticed that $16,800 is becoming an increasingly important BTC price support zone.

Point of control establishing below $17,000?

Bitcoin’s lack of volatility has led commentators to debate when a breakout could occur — and in what direction it could go.

So far, however, the increasingly narrow trading range in place since the FTX saga in November remains in control.

Now, on-chain analysis is hinting that, contrary to some beliefs, BTC/USD may not have further to fall in the current phase of the bear market.

Bitcoin (BTC) traders are desperate for fresh BTC price volatility, but opinions are diverging on when it will come.

BTC/USD is currently seeing some of the least volatile conditions in its history, price metrics show.

Volatility far from guaranteed

Since the FTX crisis, Bitcoin has settled into a historically narrow trading range which refuses to budge.

Despite macro triggers, low-volume holiday trading and a yearly candle close, BTC price action has stuck rigidly to a zone focused on $17,000.

This is the least volatile period in the history of the Bitcoin historical volatility index (BVOL), and other data likewise shows that such sideways behavior is extremely rare.

Bonk, a meme token modeled after Shiba Inu (SHIB) that launched on Dec. 25, is skyrocketing and some traders believe the token’s trading volume is potentially driving Solana’s (SOL) price up. Over the past 48 hours, SOL price has gained 34%, and in the past 24 hours, Bonk has climbed 117%, according to data from CoinMarketCap. While the wider crypto market remains suppressed, traders are hoping that Bonk could present new opportunities during the downturn. 

According to the project’s website, Bonk is the first dog token on the Solana blockchain. Initially, 50% of the token supply was airdropped to Solana users with a mission to remove toxic Alameda-styled token economics. The airdrop resulted in more than $20 million in trading volume according to the Solana decentralized exchange Orca.

High yield returns

Liquidity providers (LPs) stand to benefit from interacting with Bonk, and on Jan. 4, LPs are earning over 999% APR, which is much higher than the popular SOL/USD Coin (USDC) pairing.

While high yields do not always stay high, the current rates show large market demand for Bonk. In addition to the increase in demand, Bonk also burned 1 billion of supply on Jan. 3.

Solana (SOL) bounces alongside Bonk

Blockchains like Solana benefit from increased usage. After the FTX collapse, Solana saw multiple projects leaving the ecosystem. On Jan. 4, Solana saw an 18.6% increase in 24-hour fees and a 15.8% increase in 24-hour daily active users.

Bitcoin (BTC) is now further below a key moving average than it was at the pit of the March 2020 COVID-19 crash.

In a tweet on Jan. 4, popular trader and analyst Rekt Capital revealed just how remarkable the current Bitcoin bear market really is.

BTC price 200-week moving average out of reach

Not only has Bitcoin now spent more time below its 200-week moving average (WMA) than ever before, it is now further beneath it than at any time in history.

Looking at the weekly BTC/USD chart, Rekt Capital confirmed that as of Jan. 4, BTC/USD traded around 37% below the 200 WMA.

This, he noted, was “Deeper than the -31% retracement in March 2020.”

Bitcoin (BTC) continued to work on cracking the $17,000 mark on Jan. 4 as an “extremely tight” trading zone held firm.

$17,000 “possible” thanks to CPI print

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD hitting $16,906 on Bitstamp, up $300 from the previous day’s low.

The largest cryptocurrency had benefited from a positive start to the year on Wall Street, this giving a broader boost to previously sideways crypto assets.

“Bitcoin trading with legacy markets yesterday,” Filbfilb, co-founder of trading suite DecenTrader, began a summary of recent events by stating.

Analyzing the 12-hour chart, he argued that the 50-day moving average (MA) needed to hold for bulls, with the immediate range support and resistance levels at $15,500 and $18,000, respectively.

Continuing with 2022’s trend, there is a lack of positive excitement in the crypto market. While Bitcoin (BTC) and altcoins have remained stagnant to start 2023, there are a few reasons why volatility could spike in January. 

Winklevoss Letter to DCG stirs up bankruptcy FUD

On Jan. 2, Cameron Winklevoss, the co-founder of Gemini, penned an open letter to Digital Currency Group (DCG) founder, Barry Silbert demanding answers on the $900 million in locked customer funds. Gemini launched the “Earn” program in coordination with Barry Silbert and the $900 million in customer funds have been locked since Nov. 16 due to DCG liquidity issues. After the letter, crypto Twitter began generating FUD toward DCG, believing there to be liquidity issues akin to 3 Arrows Capital and FTX.

The financial strain the large Gemini hole could place on DCG is significant because they may be forced to sell sizable GBTC and ETHE positions, along with other positions in trusts run by their sister company Grayscale. According to Arcane Research, another path for DCG to meet debt obligations would be to initiate a Reg M.

Vetle Lunde, Senior Analyst at Arcane Research, noted:

“A Reg M would cause a massive arbitrage strategy of selling crypto spot versus buying Grayscale Trust shares. If this scenario plays out, crypto markets could face further downside.”

Bitcoin (BTC) inched closer to $17,000 on Jan. 3 as the first Wall Street open of the year loomed.

Consensus builds for fresh attack on $17,000

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD reaching highs of $16,766 on Bitstamp — its best performance since Dec. 27.

Analysts and traders were keenly awaiting the start of Wall Street trading after European stocks posted gains the day prior and United States futures followed suit.

As Cointelegraph reported, both equities and gold had looked considerably more appetizing than Bitcoin since the FTX meltdown in November.

“If BTC is finally ready to join the party, I could see it run to 17.3K~ as drawn below,” popular trader Crypto Chase wrote in part of analysis on Jan. 2.

Bitcoin (BTC) volatility is declining on schedule but BTC price action could still “play catch up” with gold this year.

The latest data and analysis show that despite sideways moves in Bitcoin, the largest cryptocurrency is behaving as expected.

BTC price volatility follows bear market pattern

With traders frustrated by a lack of tangible moves on BTC/USD, volatility is under the microscope at the start of 2023.

For analytics resource Ecoinometrics, however, there is nothing to worry about — Bitcoin is becoming more stable with time, and this is a feature, not a bug.

In Twitter comments on Jan. 2, it stated that “so far the pattern of less extreme volatile events as Bitcoin matures is confirmed.”

Bitcoin (BTC) begins the first week of 2023 in an uninspiring place as volatility stays away — along with traders.

After failing to budge throughout the Christmas and new year break, BTC price action remains locked in a narrow range.

Having sealed yearly losses of nearly 65% in 2022, Bitcoin has arguably seen a classic bear market year, but for the time being, few are actively predicting a recovery.

The situation is complex for the average hodler, who is watching for macro triggers courtesy of the United States Federal Reserve and economic policy impact on dollar strength.

Prior to Wall Street returning on Jan. 3, Cointelegraph takes a look at the factors at play when it comes to BTC price performance in the coming week and beyond.

Futures and options let traders put down only a tiny portion of a trade’s value and bet that prices will go up or down to a certain point within a certain period. It can make traders' profits bigger because they can borrow more money to add to their positions, but it can also boost their losses much if the market moves against them.

Even though the market for crypto derivatives is growing, the instruments and infrastructure that support it are not as developed as those in traditional financial markets.

Next year will be the year that crypto derivatives reach a new level of growth and market maturity because the infrastructure has been built and improved this ye, and an increasing number of institutions are getting involved.

Crypto derivatives' growth in 2023

In 2023, the volume of crypto derivatives will continue to grow because of two factors: first, the growth of relevant infrastructure such as applications for decentralized finance (DeFi) and also because of more professional and transparent intermediaries planning to enter the space. Eventually, this will lead to more institutions getting involved.

Understanding why traditional financial institutions use derivatives more than traditional spot markets is an excellent way to learn more about the market.