Decentral Block Post

Crypto price action has been rough over the past few months, but a few green shoots are finally beginning to emerge.

While Bitcoin (BTC) remains in a downtrend, its price has recently found support at the $17,000 level, and ping-pong price action in the $16,700–$17,300 range appears to be allowing traders to pursue some interesting setups in a few altcoins.

Let’s take a quick peek at some enticing patterns showing up on the weekly time frame.

Time for Litecoin’s halving hopium?

As a fork of Bitcoin, Litecoin (LTC) tends to turn bullish several months before its reward halving takes place, as was the case in 2015 and 2019.

Litecoin’s next reward halving is 237 days away, and it appears that the altcoin is undergoing a little pre-halving hype. Since Nov. 6, LTC has gained 58.6%, and it is starting to mirror the triple price action that occurred in previous halvings.

Bitcoin (BTC) fell on the Dec. 9 Wall Street open as United States economic data appeared to disappoint markets.

Attention turns to Bitcoin vs. CPI "big trigger"

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD dipping to come closer to $17,000 after passing the level overnight.

The pair reacted badly to U.S. Producer Price Index (PPI) data, which despite being above expectations still beat the readout from the month prior.

“Bit of an over reaction towards PPI, which has been dropping significantly from last month, but less than expected,” Michaël van de Poppe, founder and CEO of trading firm Eight, responded.

Van de Poppe, like others, noted that the crux of macro cues would come next week in the form of Consumer Price Index (CPI) print for November.

Bitcoin (BTC) stayed higher after a $17,000 liquidity grab on Dec. 9 as traders targeted further upside.

Bitcoin attempts new monthly high

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD cooling volatility once more after hitting $17,300 on Bitstamp.

The pair had begun by taking liquidity at the Dec. 8 Wall Street open, this snowballing to see it challenge one-month highs from Dec. 5.

For those already betting on upward continuation, the move came as little surprise, with the coast still clear to add to the gains.

“The move to 18-19k $BTC continues,” popular trader Credible Crypto summarized.

The total cryptocurrency market capitalization dropped 1.5% in the past seven days to rest at $840 billion. The slightly negative movement did not break the ascending channel initiated on Nov. 12, although the overall sentiment remains bearish and year-to-date losses amount to 64%.

Bitcoin (BTC) price dropped 0.8% on the week, stabilizing near the $16,800 level at 10:00 UTC on Dec. 8 — even though it eventually broke above $17,200 later on the day. Discussions related to regulating crypto markets pressured markets and the FTX exchange collapse limited traders' appetites, causing lawmakers to turn their attention to the potential impact on financial institutions and the retail investors' lack of protection.

On Dec. 6, the Financial Crimes Enforcement Network (FinCEN) said it is "looking carefully" at decentralized finance (DeFi), while the agency's acting director, Himamauli Das, said the digital asset ecosystem and digital currencies are a "key priority area" for the agency. In particular, the regulator was concerned with DeFi's "potential to reduce or eliminate the role of financial intermediaries" that are critical to its AML and CFT efforts.

Hong Kong's legislative council approved a new licensing regime for virtual asset service providers. From June 2023, cryptocurrency exchanges will be subject to the same legislation followed by traditional financial institutions. The change will require stricter anti-money laundering and investor protection measures before being guaranteed a license of operation.

Meanwhile, Australian financial regulators are actively working on methods for incorporating payment stablecoins into the regulatory framework for the financial sector. On Dec. 8, the Reserve Bank of Australia published a report on stablecoins citing risks of disruptions to funding markets, increasing bank exposure and liquidity. The analysis highlighted the particular fragility of algorithmic stablecoins, noting the Terra-Luna ecosystem collapse.

Algorithmic stablecoins have had a rough year, starting with UST de-pegging to zero and the subsequent blow-up of Terra’s LUNA token which was used for the asset’s backing. Algorithmic stablecoins are not fully collateralized and rely on different mechanisms to maintain the peg, making them inherently fragile to market conditions. 

The UST implosion created a domino effect that caused another stablecoin, Magic Internet Money (MIM) to de-peg. Despite the fragility of algorithmic stablecoins, new projects like Djed by Cardano (ADA) are still planning on launching, but that doesn’t mean that the concept has improved since the crises seen earlier in the year.

Let’s look at the latest de-peg event in the cryptocurrency space.

On Dec. 8, the Digital Asset eXchange Association (DAXA), which consists of the five major crypto exchanges in Korea issued a warning for Waves and its (WAVES) token.

The warning comes after the stablecoin, USDN which is backed by WAVES, de-pegged and has thus far failed to re-establish the $1 peg in more than 180 days. This means that the USDN protocol may liquidate WAVES through the automatic arbitrage process in an attempt to regain the peg. On Dec. 8, USDN was 16% below the peg.

Bitcoin (BTC) ranged below $17,000 at the Dec. 8 Wall Street open as the U.S. dollar threatened further weakness.

Dollar dips as stocks see modest upt

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD practically flat over the 24 hours to the time of writing.

With macro cues lacking, analysts eyed a potential breakdown in U.S. dollar strength as the next volatility catalyst for crypto and risk assets.

The U.S. dollar index (DXY) looked set to challenge multi-day support, wicking below 105 multiple times on the day.

“$DXY’s first time under the 100 day MA since June of ‘21,” Joe Cariasare, co-host of the Inside Bitcoin podcast, noted.

Bitcoin (BTC) and crypto are only used by 13.7% of Americans, but they generate more exchange volume than anyone else.

The latest data compiled by exchange Huobi confirms that in 2022, the United States is the most “mature” cryptocurrency market.

U.S., Vietnam lead the way on crypto

Despite the heavy drawdowns in price for Bitcoin and altcoins this year, interest throughout the world remains “extremely active,” and the leaders may come as a surprise.

In its latest annual report, Huobi Research, an affiliate of Huobi Global, revealed that the U.S. accounts for 9.2% of global centralized exchange (CEX) volume. When it comes to DeFi, the figure is even higher — 31.8% of global volumes.

At the same time, the percentage of the population using crypto is not as high as in some other jurisdictions. 13.7% of Americans use crypto, the report said, compared to 20.3% Vietnam, the leader out of the 15 countries examined.

Bitcoin (BTC) investment vehicle, the Grayscale Bitcoin Trust (GBTC), is trading close to 50% below the BTC price on spot markets.

Data from on-chain analytics platform Coinglass confirms that on Dec. 8, GBTC shares hit a new record low of -47.2% against BTC/USD.

GBTC troubles pile up post-FTX

In the latest bout of nerves to hit the Bitcoin industry since the fall of FTX, GBTC is nearing half-price versus the price of Bitcoin.

The largest institutional Bitcoin investment vehicle, with assets worth around $10 billion, GBTC has faced numerous challenges in recent years.

The price of its shares previously traded higher than BTC/USD, resulting in what was called the “GBTC premium.” Since 2021, however, that premium has turned negative, but the resulting “discount” has done little to lure additional institutional interest.

Chainlink has a busy start to December when it comes to development launches. The Chainlink (LINK) staking program opened up for early access on Dec. 6 and will expand access on Dec. 8. 

According to Chainlink, staking will further secure the project’s node ecosystem and alerting mechanism:

“Stakers gain access to staking rewards for securing the network through timely and valid alerts, and in the future, for slashing and loss protection.”

Historically, mainnet launches and staking incentives stir up a flurry of blockchain activity and data from on-chain analytics firm Arkham shows a sharp uptick in activity.

While node providers received access on Oct. 3 with uncapped terms, Chainlink’s early access staking capped the total per person staking at 7,000 LINK. Despite this cap, the staking program has garnered traction, far surpassing 11 million staked LINK on Dec. 6.

Bitcoin (BTC) price crashed to $15,500 on Nov. 21, driving the price to its lowest level in two years. The 2-day-long correction totaled an 8% downtrend and wiped out $230 million worth of leverage long (buy) futures contracts. 

The price move gave the false impression to bears that a sub-$15,500 expiry on the Dec. 9 options expiry was feasible, but those bets are unlikely to pay off as the deadline approaches.

Year-to-date, Bitcoin price is 65% down for 2022, but the leading cryptocurrency remains a top 30 global tradable asset class ahead of tech giants like Meta Platforms (META), Samsung (005930.KS), and Coca-Cola (KO).

Investors' main concern is still the possibility of a recession if the U.S. Federal Reserve raises rates for longer than expected. Proof of this comes from Dec. 2 data which showed that 263,000 jobs were created in November, signaling the Fed’s effort to slow the economy and bring down inflation remains a work in progress.

On Dec. 7, Wells Fargo director Azhar Iqbal wrote in a note to clients that "all told, financial indicators point to a recession on the horizon." Iqbal added, "taken together with the inverted yield curve, markets are clearly braced for a recession in 2023."

Bitcoin (BTC) hit new month-to-date lows on Dec. 7 as Asian markets fell during trading.

$16,500 stands as support as BTC price wobbles

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD dipping to lows of $16,736 on Bitstamp, a level not seen since Nov. 30.

The pair thus began to erase the ground it had reclaimed into the November monthly close, showing heavy influence from Asian equities prior to the Wall Street open.

The mood was nervous on the day, with Hong Kong’s Hang Seng index down 3.2% at the time of writing and the Nikkei 225 and Shanghai Composite Index 0.7% and 0.4% lower, respectively.

“Welp, there we go with Bitcoin, couldn't hold support and started falling down, just like indices have been showing weakness,” Michaël van de Poppe, founder and CEO of trading firm Eight, reacted.

Ether (ETH) rallied 11.3% between Nov. 28 and Dec. 5, peaking at $1,300 before facing a 4.6% rejection. The $1,300 resistance level has been holding ground for twenty-six days and is the most likely explanation for the correction to $1,240 on Dec. 6. 

So from one side, traders are relieved that Ether is trading 16% above the $1,070 low reached on Nov. 22, but it must be frustrating to fail at the same level the entire week. In addition to the price rejection, investors' mood worsened after three members of the United States Senate reportedly requested information from Silvergate Bank regarding its relationship with FTX.

The lawmakers raised questions after "reports suggesting that Silvergate facilitated the transfer of FTX customer funds to Alameda'' and gave the bank until Dec. 19 to issue a response.

On Dec. 5, NBC News reported that Silvergate claimed to be a "victim" of FTX's and Alameda Research's "apparent misuse of customer assets and other lapses of judgment."

Newsflow remained negative after the Financial Times reported that the United Kingdom Treasury is finalizing some guidelines to restrict cryptocurrency sales from abroad. The changes would enable the Financial Conduct Authority (FCA) to monitor the crypto companies' operations in the region. The guidelines are being prepared as a part of the financial services and markets bill.

After a whirlwind November for Bitcoin (BTC), certain on-chain and Bitcoin price metrics are suggesting that BTC’s bottom could occur in December. In Capriole Investments' latest report, they provide analysis on Bitcoin finding the bottom. When taking into realized value, miner capitulation, mining electrical costs, downdraw and record hodler numbers, a BTC floor of $16,600 - $16,950 seems formed. 

Here are five reasons why Edwards believes Bitcoin price is coming closer to a cycle bottom.

SLRV Ribbons flash a buy signal

The SLRV Ribbons track investment flows by combining the 30-day and 150-day moving averages to the SLRV Ratio which is a percentage of the Bitcoin moved in 24 hours divided by BTC held for 6-12 months.

According to Charles Edwards, the SLRV Ribbons outperform the BTC HODL strategy, making it a strong indicator of where BTC price might be headed.

While the SLRV Ribbons have been bearish throughout 2022, the recent move to $16,600 flipped the indicator to bullish. According to Edwards, the change creates a buy signal for investors and institutional funds still in the market, thus building a strong case for Bitcoin’s price floor.

Ethereum's native token, Ether (ETH), eyes a strong bullish reversal after losing 25% from its November high of $1,675, according to a bottom fractal spotted by independent market analyst Wolf.

Can Ethereum price co its March 2020 fractal?  

Wolf compares Ethereum's multi-month downtrend between May 2018 and March 2020 with a similar but relatively shorter correction after July 2022. If the move repeats, that means the price of Ether has bottomed in November 2022, according to the analyst, as shown below.

Wolf draws cues from March 2020's Ethereum price crash triggered by the Covid-19 pandemic — a black swan event. Similarly, ETH price was pushed down in November 2022 due to another black swan — the collapse of cryptocurrency exchange FTX.

But ETH/USD rebounded aggressively after the March 2020 crash, boosted by the Federal Reserve's rate cuts that injected more money into the economy, part of which flowed into the crypto market.

Similarly, in November 2022, Ether's modest recovery post-FTX "black swan" coincides with growing expectations of the Fed slowing its rate hikes. Thus, Ether has a good chance at repeating the March 2020 fractal to new monthly highs.

Bitcoin (BTC) and decentralized blockchains are “as strong as ever” in the wake of the FTX meltdown, ARK Invest says.

In the latest edition of its monthly newsletter, “The Bitcoin Monthly,” the investment giant came out firmly bullish on BTC.

ARK: FTX scandal may be "most damaging event" ever

With BTC price volatility ebbing into December, the industry is still reeling from ongoing FTX contagion.

As lawmakers only begin to get to grips with the events, when it comes to Bitcoin, ARK is doubling down on its conviction — and setting it firmly apart from centralized alternatives.

“The fall of FTX could be the most damaging event in crypto history,” one of the latest report’s “key takeaways” states.

Bitcoin (BTC) spending an “unprecedented” period below a key moving average is a poor guide to the 2022 bear market.

That was the opinion of analyst Superswell, who this week championed on-chain metrics as a way of understanding current BTC price action.

“Business as usual so far” for Bitcoin bear market

In a series of tweets on Dec. 5, Superswell challenged those concerned about the 200-week simple moving average (SMA) disappearing as support on BTC/USD.

“Over the last few months, I've seen quite a few people point out that BTC failing to find support at the 200wkSMA is unprecedented and therefore we're in uncharted territory - especially considering how much time we have spent below,” part the thread read.

“This is where I personally feel that onchain data provides better information as to where we are in relation to historical capitulations than TA (ie: 200wkSMA).”

Bitcoin (BTC) price is showing notable resilience at the $17,000 level, and according to data from Glassnode, a number of metrics that track the pace of selling and the on-chain behavior of investors are beginning to show a reduction in the factors that trigger sharp sell-offs.

The FTX bankruptcy fueled a historic sell-off resulting in $4.4 billion in realized Bitcoin losses. By analyzing realized losses with the daily weighted average metric, Glassnode analysts found that the on-chain losses are subsiding.

According to Glassnode, Bitcoin hit an all-time low in the realized profits versus losses ratio. Toward the end of the most recent bull market, realized losses were 14 times larger than profits, which historically coincided with a positive market shift.

The on-chain data also shows realized losses are declining and Bitcoin price is above the balanced price and realized cap is dropping, removing excess liquidity generated from over-leveraged entities. 

Realized cap suggests excess liquidity is drained

The realized cap is the net sum of Bitcoin capital inflows and outflows since BTC’s launch.

Bitcoin (BTC) cooled volatility above $17,000 into the Dec. 5 Wall Street open as traders confirmed upside targets.

Bitcoin traders warm to near-term upside

Data from Cointelegraph Markets Pro and TradingView followed BTC/USD as it held overnight gains, having hit three-week highs.

The weekly close itself was encouraging for some, forming Bitcoin’s highest since the FTX scandal broke.

Now, traders were hoping that upside would continue toward $20,000, with various resistance zones in play.

“Slowly, but surely, Bitcoin is grinding upwards. Needs to crack $17.4-17.6K, but then we most likely continue quite fastly towards $19K,” Michaël van de Poppe, founder and CEO of trading firm Eight, wrote in an update on the day.