/ Crypto Weekly

Markets rallied, Ethereum ecosystem surged with Shanghai Fork approaching, and Miss El Salvador wore Bitcoin well

An illustrious 7-day sea of green blanketed crypto markets with Bitcoin price finally finding a reversal point and subsequently hitting a 2-month high. The US laid a blanket of its own - of rampant regulation by enforcement - but even that could not suppress the collective relief traders felt as crypto markets rallied.

At a glance...




  • Ethereum ecosystem gathering momentum
  • US regulators taking big action
  • China’s digital Yuan meets milestone
  • Gitcoin is going decentralized
  • Miss Universe El Salvador represents Bitcoin


Top Market Trends

  • Ethereum’s Shanghai Upgrade is tentatively set for March as announced in an All Core Devs (ACD) call on January 5th. The developers also agreed to deploy the public testnet for Ethereum’s Shanghai and Capella upgrades.
  • Lido (LDO) topped Maker this week for a brief period, making it the largest DeFi protocol, as interest in liquid staking protocols continues to grow.
  • The Digital Yuan (e-CNY) debuted in China’s currency circulation report, with 13.6B e-CNY reportedly in circulation (about .13% of total yuan).
  • US regulators came down hard this week; the CFTC sued Mango Market’s Avraham Eisenberg, the DOJ seized 55 Robinhood shares from Sam Bankman-Fried, and the SEC slapped Genesis and Gemini with charges of unregistered securities.

Movers and Shakers

Top 7-day Gainers:

  1. APT +85.8%
  2. LDO +51.2%
  3. ZIL +43.3%
  4. MANA +38.2%
  5. FTM +35.0%

Top 7-day Losers:

  1. XYO -2.8%
  2. NEXO -2.4%
  3. BSV -1.6%
  4. LEO -0.9%
  5. ELF -0.4%

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Technical Summary

Bitcoin Pulse

Bitcoin jumped briefly to $19,000, posting the highest price since November as news of waning inflation numbers was released. Meanwhile, Alejandra Guajardo, El Salvador’s representative at Miss Universe 71, sported a Bitcoin-themed outfit during this year’s pageant.

  • Bitcoin’s hash rate reached an all-time high with a 14-day moving average of 270 EH/s, clinching its recovery since a US arctic weather pattern caused many miners to go offline.
  • As a result of the hash rate ATH, we can expect a difficulty increase of ~10% coming up on January 15, a solid indicator of Bitcoin's strong, growing blockchain network.
  • Bitcoin’s dominance rate (BTC.D) showed signs of surging, after dropping to start the year, and is now at about 42%.

BTC - Low Timeframe

tl/dr:

  • BTCUSD has been in an aggressive, impulsive, and volatile move.
  • Lower time frames are a reflection of that.
  • Lower time frame moves will be heavily influenced by the higher time frame sentiment.
  • Consolidation period is expected and at this point, LTFs will take over again.
  • Expect the following scenarios to take place:
    • Short-term retracement to trick sellers to enter shorts.
    • Retracement to the bullish order block and closure of the 1H fair value gap.
    • Movement higher deeper into the bearish order block sat just above is to be targeted first.

BTC-MICRO

Given that BTCUSD has been in an aggressive, impulsive, and volatile move, our lower time frames are a reflection of that. Moving forward, we expect the following scenarios to take place:

  1. We get a short-term retracement to trick sellers to enter shorts that will end up fueling the buyers, via a retracement to the bullish order block; closure of the 1H fair value gap, and reaching discount of the 4H range.
  2. Price has not yet found value for shorts and a movement higher deeper into the bearish order block sat just above is to be targeted first.

It's critical to understand that because we've taken higher time frame structures, lower time frame moves will be heavily influenced by that sentiment until we re-enter a consolidation period, at which point LTFs will take over again.

BTC - Macro View

tl/dr:

  • Volatility returned to the crypto market this week.
  • BTCUSD reached a lower time frame value for short traders to enter however failed.
  • Aggressive buying pressure led to a large impulsive price move that targeted filling the daily fair value gap.
  • There is confirmation of bullish intent via bullish trend continuations
  • Monthly support was found in November.
  • Multiple levels of resistance still in the way before saying we are long-term bullish.
  • Scenarios to watch for:
    • Bulls continue to target the next logical resistance area at the equilibrium of the monthly range
    • We find bulls close some of their positions and early sellers enter the market to push price down into the $17,500 at minimum before expected continuations.

As we previously forecasted, volatility re-entered the crypto market this week as the holiday period ended, leading to price breaking out of the short-term ranges it had been accumulating in.

BTC-MACRO

BTCUSD reached its lower time frame value for short traders to enter, coinciding with the daily 50MEA, at which point we saw aggressive buying pressure lead to a very large impulsive price move that raided the $18,300 range high and targeted filling the daily fair value gap in the immediate past price.

Now that we see daily follow-through and confirmation of bullish intent via bullish trend continuations, we're more confident that monthly support was found in November.

However, we have multiple levels of resistance still in our way before we can truly say we are long-term bullish. Moving forward, the scenarios we would be watching are as follows: Selling pressure is likely to come in at:

  1. Bulls continue to stay in control and target the next logical resistance area at the equilibrium of the monthly range ($25,200-$15,500) around the $20,100 price point, which coincides with bearish order blocks and fair value gap closures and the daily 200EMA. All confluences of value for short traders.
  2. We find bulls close some of their positions and early sellers enter the market to push price down into the $17,500 at minimum before expected continuations, which coincides with the daily 50 EMA.

Altcoins on the Move

Ethereum (ETH) price, which had flattened into an accumulation phase in mid-December, has been rising steadily since the New Year began, +12% over 7 days. Liquid staking protocol Lido DAO (LDO) jumped 50% as news of a tentative date for Ethereum’s Shanghai Upgrade was announced. Solana (SOL) reached its 14th day of “surge and stabilize” price action.

  • Several other liquid staking platforms were rallying alongside LDO, including Rocket Pool (RPL) and Frax (FXS), who were up 25% and 29% respectively.
  • Ethereum Layer-2 scaling protocols Arbitrum and Optimism (OP) combined for more transactions than Ethereum.
  • Each of the top 10 cryptocurrencies by market cap posted double digit gains for the week.

Ethereum Macro

tl/dr:

  • ETH reflects the sentiment that entered BTC this week.
  • Aggressive, volatile moves to the upside continue to target areas of value
    ETH pushed higher this week and reached a possible area of value earlier than BTC.
  • Expect the following scenarios moving forward:
    • Price has found value for shorts at the current price levels and a sell-off to bullish areas of value ($1230-$1100).
    • Price has not yet found value and we push higher to test through the 200 ema, mitigated deeper bearish order blocks, and make our way deeper into premium prices raiding liquidity pools above previous weekly highs ($1670).

As usual, ETH is a reflection of the sentiment that entered BTC this week. Aggressive, volatile moves to the upside continue to target areas of value.

ETH-MACRO

ETH pushed higher this week, reaching a possible area of value earlier than BTC. We saw price reach premium prices; mitigate a bearish order block in premium and start to come close to the daily 200 ema.

We expect the following scenarios moving forward:

  1. Price has found value for shorts at the current price levels albeit we may see a few days of consolidation beforehand and we start to see a sell-off to bullish areas of value ($1230-$1100).
  2. Price has not yet found value and we push higher to test through the 200 ema, mitigated deeper bearish order blocks, and make our way deeper into premium prices raiding liquidity pools above previous weekly highs ($1670).

Newsworthy:

  • Amazon Web Services (AWS) is set to work with Ava Labs to support building out Avalanche’s enterprise Dapps and infrastructure. AVAX surged almost 30% on the news.
  • Crowdfunding platform Gitcoin is retiring its centralized grants platform and is transitioning to a decentralized protocol. The new version launched its alpha testing phase with partners Fantom and UNICEF on January 10, 2023.
  • In NFTs, Tennis Australia plans to launch 2454 Ethereum-based NFTs for the upcoming Australian Open, Yuga Labs announced its mint for Skill-Based NFTs, and Solana NFTs Bonk Inu 10x’ed over a few days, bringing in $900k in trading volume.

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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.