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Litecoin (LTC) has rebounded by 130% to almost $100 after bottoming out near $40.50 in June 2022. The primary reasons include broadly improving risk-on sentiment and euphoria around the Litecoin halving in August 2023.

However, technicals suggest that LTC may wipe out most of these gains in the coming months.

LTC price paints giant bear flag 

Litecoin stands to pare its gains mainly due to a giant bear flag on the weekly char. 

A bear flag is a bearish continuation pattern that occurs when the price consolidates inside an ascending, parallel channel after undergoing a strong downtrend. It resolves after the price breaks below its lower trendline with a rise in trading volumes

Litecoin has been painting a similar pattern since early June 2022. Previously, the LTC/USD pair had undergone a 70% price correction from $130 to $40.50. Thus, from the technical perspective, it would resume its downtrend course if its price breaks below the lower trendline.

Despite the plans to turn the region into a bustling crypto hub, the United Kingdom’s financial watchdog says it has given the all-clear to only41 out of 300 crypto firm applications seeking regulatory approval to date.

The U.K. Financial Conduct Authority (FCA) implemented the new cryptocurrency-focused regulations on Jan. 10, 2020, to supervise businesses operating in the sector and to ensure that they’re subject to the same anti-money laundering (AML) and counter-terrorism financing (CTF) regulations as firms in traditional financial markets.

A statement from the FCA has revealed that of the 265 applications that were "determined" a mere 15% of these applications were approved and registered, 74% of firms either refused or withdrew their application, while 11% were rejected. Another 35 applications are yet to be determined.

While the FCA didn’t expressly state the cause of d the rejected or withdrawn applications, it did provide feedback on “good and poor quality” applications.

Among the more complete applications included a detailed description of the firm’s business model, the roles and responsibilities of business partners and service providers, sources of liquidity, flow-of-funds charts, and an outline of the policies and systems set in place to manage risk, the report stated.

Stablecoins in the cryptocurrency market help provide USD pegged tokens within the volatile industry. In bull markets, the market capitalization of stablecoins tends to decrease as investors flock to more volatile assets and in bear markets, investors seek shelter in low volatility stablecoins thus increasing their market caps.

On Jan. 26, the total market capitalization for stablecoins like Tether (USDT), USD Coin (USDC), Binance USD (BUSD) and Dai (DAI) is over $131 billion.

Stablecoins are so crucial to the future of crypto, that Moody’s, a well-respected analytics agency, is planning to develop a scoring system. The scoring system may help reduce the speculation and fear that some investors have with stablecoins.

Such fear amid a lack of stablecoin transparency has led one of the top stablecoins, BUSD, to see a major usage decline in recent weeks.

Let’s examine the factors affecting the BUSD stablecoin.

Kevin Rose, the co-founder of the nonfungible token (NFT) collection Moonbirds, has fallen victim to a phishing scam leading to more than $1.1 million worth of his personal NFTs stolen.

The NFT creator and PROOF co-founder shared the news with his 1.6 million Twitter followers on Jan. 25 asking them to avoid buying any Squiggles NFTs until they manage to get them flagged as stolen.

“Thank you for all the kind, supportive words. Full debrief coming,” he then shared in a separate tweet about two hours later.

It is understood that Rose’s NFTs were drained after signing a malicious signature that transferred a significant proportion of his NFT assets to the exploiter.

An independent analysis from Arkham found that the exploiter extracted at least one Autoglyph (345 ETH), 25 Art Blocks — also known as Chromie Squiggle — (332.5 ETH) and nine OnChainMonkey items (7.2 ETH).

Bitcoin (BTC) has been consolidating near $23,000 for the past few days. The next big question troubling investors is whether the rally is over or if Bitcoin resume its recovery.

The strong year-to-date rally in Bitcoin has turned several analysts bullish in the short term. They anticipate Bitcoin to extend its up-move and reach $25,000 and even $30,000.

However, for the slightly longer term, analysts seem to be divided. In comments to Cointelegraph, economist Lyn Alden said Bitcoin could face “considerable danger” in the second half of 2023 as liquidity risks rise.

On the other hand, ARK Invest CEO and chief investment officer Cathie Wood said in a company video blog on Jan. 23 that crypto assets could witness a huge turnaround in 2023 as the Fed pivots due to falling inflation.

What are the critical support and resistance levels to watch out for? Let’s study the charts of the top-10 cryptocurrencies to find out.

Online fraudsters are impersonating major cryptocurrency firms like Ripple and Binance by creating fake websites and email imposters pretending to provide staking services for XRP.

One such website, ripple.com-staking.tech, includes a blog post titled “XRP staking set to debut January 2023 for retail users,” inviting users to “stake” their XRP with unrealistic returns on investment (ROI), ranging from 12% to 27%. The fake scheme attempts to rush XRP investors’ decision by stating that only the first 10,000 accounts will receive a higher ROI.

The fake website provides a well-crafted clone of Ripple’s website, ripple.com, by copying the original layout, and fonts and linking some of its previous blog posts. The impersonators also attempted to add more credibility to their posts by adding information about the importance of self-custody using major hardware wallets like Ledger or Trezor.

The scam website has a lot of mirror domains like ripple.org.th or ripple.com.ve, targeting XRP users from all over the world.

The cryptocurrency community has raised flags about a new scam scheme targeting XRP (XRP) investors through a fake staking program.

The price of Ether (ETH) rallied 16% between Jan. 14 and Jan. 21, peaking at $1,680 before facing a 5.4% rejection. Curiously, the same resistance level resulted in a substantial correction in late August 2022 and again in early November 2022. 

From one side, traders are relieved that Ether is trading up 35.5% year-to-date, but the repeated corrections that follow retests of the $1,680 resistance may have weakened investors' sentiment.

Negative newsflow might have limited Ether investors' appetite after troubled cryptocurrency company Digital Currency Group (DCG) faced more legal issues this week. On Jan. 23, a group of Genesis Capital creditors filed a lawsuit alleging violations of federal securities laws. In addition, the plaintiffs allege the lending firm made false and misleading statements through a scheme to defraud potential and existing digital asset lenders.

Another new concerns for Ether holders came on Jan. 22 after, a "temperature check" proposal to deploy the Uniswap v3 protocol to BNB Chain received overwhelming support from the Uniswap community. 80% of Uniswap's UNI governance token holders have voted to deploy the additional version of the decentralized exchange protocol.

On the bright side, Ethereum developers have created a testing environment for the upcoming Shanghai network upgrade. According to Ethereum developer Marius Van Der Wijden, the testnet appears to have been created to evaluate staking withdrawals, which are currently disabled on the mainnet. Over 14.5 million ETH (worth $23 billion) has been deposited into the Ethereum staking contract, and harsh criticism followed the multiple delays in enabling withdrawals.

The metaverse hype that began in 2021 dissolved almost entirely by the end of 2022 as the top projects in the space, Decentraland, and The Sandbox, lost 95% of their market capitalization. The most prominent reason for the fall was lack of usage growth. 

Still, the metaverse narrative is far from dead and will grow in the future. Reportedly, Apple will launch its VR gear sometime in spring 2023. The announcement was a positive catalyst for MANA and SAND, causing a double-digit price surge.

While there’s evidence of positive buying volume supporting the pump, the weak fundamentals of metaverse platforms and overheated market indicators suggest that the price pump risks reversing quickly.

The Apple pump and dump

Facebook's (Meta) foray into the metaverse was one of the most prominent catalysts for metaverse tokens. The idea for Decentraland and The Sandbox's growth is that a decentralized metaverse would flourish more than Meta's centralized version.

However, technology has yet to become popular among the masses. In 2022, the percentage of VR users among Steam gamers was less than 2%, and the usage has yet to grow over the past two years. This is discouraging for the technology's adoption because the gaming sector was the first to embrace it.

This week on The Market Report, the resident experts at Cointelegraph discuss the real reasons behind the recent price pump in the market. Can this lead to a $25,000 Bitcoin (BTC) and beyond, or will some unforeseen event ruin the party? Tune in to find out.

We start off this week’s show with the latest news in the markets:

Stablecoin data points to ‘healthy appetite’ from bulls and possible Bitcoin rally to $25K

Bitcoin rallied 11% between Jan. 20 and Jan. 21, reaching the $23,000 level and shattering bears’ expectations for a pullback to $20,000. Even more notable is that the move brought demand from Asia-based retail investors, according to data from a key stablecoin premium indicator. Another bit of bullish information came on Jan. 20 after United States Federal Reserve Governor Christopher Waller reinforced the market expectation of a 25 basis point interest rate increase in February. Do these and other odds favor a rally toward $24,000 or maybe even $25,000? 

SEC commissioner reminds of ‘the point of crypto’ as market aims for recovery

Bitcoin’s (BTC) price has risen about 37% year-to-date and is not showing any signs of slowing down. The S&P 500 index (SPX) has also made a winning start to the year but has seen a relatively muted rally of roughly 4%.

While the price of risky assets are rising, the United States dollar index (DXY), perceived as a safe haven, extended its downtrend and declined more than 1% in January.

The change in sentiment toward risky assets may have been triggered by expectations that the U.S. Federal Reserve could slow down its rate hikes as inflation cools off. Some analysts even expect the Fed to pivot and start cutting rates before the end of the year.

Several analysts remain skeptical about Bitcoin’s rally but the longer the price sustains above $20,000, the greater the possibility that the macro low may have been made in November. If the next decline forms a higher low, it could further confirm that the worst may be behind us.

Could the rally in Bitcoin and altcoins witness profit booking in the next few days? Let’s study the charts to find out.

Axie Infinity (AXS) has rallied 135% month-to-date to reach approximately $14 on Jan. 23, its highest level in two months. Nonetheless, the AXS/USD pair could suffer major losses in the coming weeks owing to a flurry of negative technical and fundamental indicators.

Axie Infinity price prints "gravestone" doji

The AXS price formed a "gravestone doji" candlestick on Jan. 23, which technical analysts view as a bearish reversal pattern.

A gravestone doji appears when an asset's opening, closing, and the lowest price comes to be nearly identical except for the highest price, as shown in the chart below. The long upper wick shows that the bears pared all of the gains printed by the candle during the given session.

AXS seems to have been forming a similar candlestick pattern as of Jan. 23, with bears rejecting its advance above the $14 price level, triggering a 10%-plus intraday price drop.

In addition, the rejection came as the AXS/USD pair's relative strength index (RSI) crossed into overbought territory, coinciding with its price testi the 200-day exponential moving average (200-day EMA; the blue wave in the chart above), which has served as resistance in January 2022 and April 2022.

Japan’s new regulations allowing investors to trade using stablecoins like Tether (USDT) are expected to be adopted no later than in June 2023, according to a local financial authority.

The Financial Services Agency (FSA) of Japan is working on lifting the ban on the domestic distribution of stablecoins, planning to allow certain stablecoins later this year.

“This does not mean that all foreign products of so-called ‘stablecoins’ will be allowed without any restriction,” a spokesperson for Japan's FSA said in a statement to Cointelegraph.

FSA will only allow stablecoins that successfully pass individual checks ensuring that such cryptocurrencies are safe from the viewpoint of user protection, the FSA representative stated. Examples include foreign issuers in their countries being subject to equivalent regulations in Japan, with underlying assets being preserved appropriately, the spokesperson added.

The authority also stressed that there is no chance of knowing whether major stablecoins like Tether (USDT) or USD Coin (USDC) will be allowed. “FSA does not provide any opportunity to access such information before the decision is made,” the representative said.

Cardano stake pool operators (SPO) and users have been reporting at least half of the nodes for the network briefly went offline over the weekend. 

According to a Jan. 22 post shared on the Telegram SPO for Input Output Global, the engineering and research fintech behind the Cardano blockchain, an anomaly caused 50% of Cardano nodes to disconnect and restart. 

“This appears to have been triggered by a transient anomaly causing two reactions in the node, some disconnected from a peer, others threw an exception and restarted,” the post said, explaining the sudden disruption.

Despite a momentary degradation, the Cardano network recovered without external intervention. As explained in the post, “such transient issues” were considered in the node design and consensus and “the systems behaved exactly as expected.”

During the anomaly, which happened between block 8300569 and 8300570, block production reportedly kept going but was slowed for a few minutes and the “impact was low, akin to the delays that occur during normal operations.”

After nearly a 20% rally last week, Bitcoin (BTC) is on track to end this week with gains of roughly 10%. Bitcoin’s rally has improved sentiment and attracted buying in several altcoins. This sent the total crypto market capitalization firmly above the $1 trillion mark.

The strong recovery in Bitcoin has startled several analysts who remain skeptical about the rally. Some believe that the current rise is a dead cat bounce that will reverse direction sharply, while others see similarities between the current rally and the 2018 bear market recovery.

Although traders should be ready for any eventuality, the pace of the rise in Bitcoin does point to a possible major bottom. There are likely to be bumps down the road but the dips are likely to be aggressively purchased by traders.

Bitcoin’s sustained recovery may encourage buying in select altcoins.

Let’s study the charts of Bitcoin and select altcoins that are showing strength in the near term.