In our last Crypto Weekly for 2022, let’s take a look at some of the hottest industry trends to come in the New Year, catch you up on the week’s top news stories, and cover some expert TA on BTC and ETH price.
At a glance...
- Predictions for 2023 roll in
- Big players buying more bitcoin
- SOL reaching new lows amid NFT bridges
- Alameda wallets take unusual turn
Top Market Trends for 2023
- Privacy tech to play integral role: Messari’s Ryan Selkis was quoted in his 2023 report as saying “I’m bullish on both Zcash and Monero amidst the upcoming privacy wars. Especially Zcash.” According to Selkis, privacy tech in 2023 will become an integral part of innovation on public blockchains - unless it runs into “dystopian” government-related bans. We should see a heightened interest in privacy infrastructure investments like code integrity, decentralized hardware, governance, and scalability.
- Metaverse interoperability: As we saw with the industry’s lukewarm reaction to Meta aping into Metaverse building, another trend emerged that is likely to continue through 2023: interoperable Metaverse worlds using bridges to cross blockchains and portal into each other. As Harsh Notariya explained in his Metaverse predictions, “...the potential is vast for multiple Metaverses to co-exist.” Decentralized metaverse building (as opposed to FAANG-based initiatives) may drive the multi-world stage in 2023.
- Consolidation of layer-1 protocols: In 2022’s market, seven layer-1 blockchains were consistently among the top 20 performing coins, but a few stood out and are on track to consolidate in 2023. Nansen data cited one classic example of powerful layer-1 blockchains consolidating with the recent bridging of Solana-based NFTs to Ethereum and Polygon. Slated for Q1 2023, DeGods will add functionality on Ethereum and y00ts will bridge to Polygon. When these plans were announced, both NFT projects saw massive boosts in volume, DeGods increasing by 187% and y00ts spiking 442%. The jump in volume signals positive sentiment for ETH and MATIC as we enter the New Year.
Following the announcement that DeGods would be switching to Ethereum, its daily volume increased by 187% 📈— Nansen 🧭 (@nansen_ai) December 27, 2022
The average price went up from 426 SOL to 566 SOL (+33%) pic.twitter.com/5UZZfiD5zP
Movers and Shakers
Top 7-day Gainers:
- BIT +17.2%
- OKB +14.2%
- ICP +9.0%
- LUNC +7.1%
- LDO +7.0%
Top 7-day Losers:
- SOL -18.6%
- AXS -16.0%
- FLOW -14.6%
- APT -14.2%
- TON -14.0%
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Bitcoin price oscillated in a tight range to start the week, then dipped slightly. Traders are looking for additional BTC bottom signals but some feel another downturn is imminent. When looking at historical quarterly patterns, we might expect a lot of sideways action in 2023.
- Mark Cuban said in a Club Random podcast that he prefers investing in Bitcoin over gold. He’s also hoping the price will go down a bit more so he can scoop some up.
- An arctic blast that blanketed much of the US tested grid systems as homebound people turned up the heat to survive the freeze. As a result, Bitcoin’s hashrate dipped below 200 EH/s, slowing down block production.
- Michael Saylor was at it again; Microstrategy took a loss but then sold some Bitcoin for tax advantages. Then Saylor bought some more! He’s reportedly added 2500 more Bitcoin (currently valued at $41.5M) since November 1, 2022.
BTC - Low Timeframe
Price on the hourly chart continues to accumulate sideways, moving deeper into the discount of the short-term bullish range between $16,275 and $7,000, as predicted last week.
Given that, price has achieved:
- Mitigating a bullish order block in discount
- Raiding sell-side liquidity
- Closed hourly fair value gaps
- Reached discounted prices
It is reasonable to believe that the $16,500 price level could serve as a source of value and support for a move into the $17,000 range.
We wait to see if the level holds or if we continue to see bearish prices below the $16,300 price level.
BTC - Macro View
As the holiday period continues, low volatility and further accumulation continue to take place.
Over the past six months, BTC/USD has significantly reduced its daily volatility, with average price swings decreasing notably.
The holiday period has only further decreased the daily volatility and, as such, we would expect large catalysts to initiate a higher volatility environment sometime shortly.
As price corrects accumulatively to the downside, traders begin to see this formation as an accumulation schematic, signaling weaker increased buying pressure meeting all selling pressure, which is logical given that BTC/USD is down nearly 75% from its highs of $69,000.
We are also closing the yearly candle in the next 2 days, which will be a bearish candle. It is prudent to understand that BTC/USD has not closed two consecutive bearish candles on the yearly chart since inception.
All of the above signals to us that long-term support may have been found, and bullish trends may well initiate in 2023.
However, we must always remember, if we are seeing these signs, all market participants will be, and as such, market forces would prefer to manipulate traders via false sell-offs to generate the liquidity to fuel this direct move, so short-term bearish moves through key support levels before a turn would be logical.
We are also seeing the 200 EMA make its way closer to the current price and a golden cross in 2023 could well be on the cards.
Altcoins on the Move
Ethereum (ETH) price is attempting to establish a new support zone at $1200 while Solana (SOL) is at its lowest price since February of 2021. Nansen data detected some unusual activity from Alameda-linked ETH wallets to crypto mixers.
- Terra (LUNA) spiked 16% after a week of sideways action. Meanwhile, Luna Classic (LUNC) backtracked on significant December gains (based on a Coinbase listing rumor) when Binance announced a change in its LUNC burn rate.
- Solana (SOL) saw heavy price action in response to Solana-based NFTs DeGods and y00ts bridging to Ethereum (ETH) and Polygon (MATIC), respectively. SOL was down 18.6% over the past 7 days.
- OKB price saw its second consecutive week in the green. Around the 16th of December it spiked after Elon Musk followed the OKex exchange, but OKB managed to eke out continued gains after that hype wore away.
Very similar to BTC/USD, the continued accumulative price action signals that large volatility could soon be on the horizon.
However, unlike BTC's price action, we have yet to see an accumulation schematic appear on the daily chart, raising the question: is this a signal of divergence between both assets, indicating further downside on both as our inducing price movement before trends turn?
Shorter term, we are looking for price to make its way up into the $1400 region or down into the $1100, region before we find value in both longs and shorts.
The 50 EMA is also fast approaching to act as resistance and value for shorts or as a level of support upon a break and retest. In any case, ETHUSD is currently in a state of equilibrium between buyers and sellers, and high-time frame catalysts following the holiday period are likely to be the catalyst for the market to enter a new phase.
We wait and adjust our position accordingly.
- Mango Markets exploiter Avraham Eisenberg was taken into custody in Puerto Rico for his role in rugging Mango Markets’ $110 million crypto treasury.
- Fran Finney, wife to one of Bitcoin’s most important OGs, the late Hal Finney, announced a half-marathon fundraiser to honor her husband while raising money for ALS research.
- Pudgy Penguins NFTs broke their all-time high for floor price and are currently trading on OpenSea at 6.64 ETH per “Pengu”.
Tweet of the Week!
Satoshi Nakamoto deserves a Nobel prize in Economics.— Dan Held (@danheld) December 29, 2022
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Disclaimer: The content of this article is for general market education and commentary and is not intended to serve as financial, investment, or any other type of advice.