Technical analysis of major crypto currencies, December 12-18
Another relatively flat week is behind on the financial markets, while investors are on hold, waiting for the next monetary moves from the FOMC meeting which will be held in a week ahead.The crypto market also traded relatively flat for the third week in a row, with Bitcoin ending the week modestly above $17K, and Ether managing to hold above $1.2K.
The dust after the FTX collapse has still not settled on the market.Several US Senate members have raised questions regarding FTX`s connections with small banks in the US.In their letter, the senators referred to Moonstone, a bank based in Washington which had close ties with Alameda Research, where the company has invested $11.5 million.This comes after several similar questions have already been raised by several other senators with respect to FTX`s transactions with the Silvergate Bank.On the other side, CEO of The Block, the crypto media site, Michael McCaffrey resigned during the previous week, after it was discovered that The Block was secretly funded by Alameda Research.
During the previous week, the Securities and Exchange Commission issued a guideline in which the regulator is requesting from companies to disclose their exposures toward the cryptocurrency market.This also includes disclosure of the exposures toward the bankrupt FTX exchanger, considering that it has been estimated that the company has around 1 million creditors, as news are reporting.
The layoffs in the crypto companies continue, with the latest announcement from exchanger Kraken, one of the largest crypto exchanges in the world, that the company is planning to dismiss 1.100 jobs.
This is currently about 30% of its labour force.As a reason for such a move, the company is noting “macroeconomic and geopolitical factors”.
The ECB Director Urlich Bindseil, published a post on a ECB`s blog, stating that Bitcoin is currently “on the road to irrelevance”.He also expressed the opinion that the latest moves are only “artificially induced last gasp” which would lead the coin toward this road of its irrelevance considering that it doesn’t fit into either role of investment nor for payment.
Opposite to the central bankers are investors who still believe that Bitcoin is still to hit its new highs.Last week, the venture capitalist Tim Draper expressed his quite optimistic opinion that Bitcoin might reach the level of $250K by the middle of 2023.
This level means that BTC would need to surge by 1.400% within the next few months, which might be perceived as an extremely optimistic scenario.
Crypto market cap
The crypto market continues to slow down for a third week in a row.Strong impact on such developments have fears over FTX contingency, on one side, and forthcoming FOMC meeting on the other side.In a week ahead, there are two major events for the markets: one is release of US inflation data, after which comes December`s FOMC meeting, right before holiday season in the Western world.Current market expectations for the US inflation rate is 7.3% y/y, lower from the October data of 7.7%.The most important day to watch in a week ahead is December 14th, when FOMC is expected to further increase interest rates by an additional 50bps, as per current market expectations.In case of any deviations from market expectations, the market reaction might be significant.
It is also worth mentioning that ECB will also discuss potential further rate increase in a meeting scheduled for December 15th.The week ahead would be a very interesting one when it comes to macro data.
Total crypto market capitalization remained flat during the previous week, with incremental change of $3B on a plus side.What is a bit concerning is that daily trading volumes continued to decrease, dropping from the level of $60B a week before, down to $40B during the previous week.This is indication that the market is dried up and that investors are withholding any sort of trading or investments, waiting for a situation to be clearer in the coming period.In case that next week doesn’t bring any significant change, it could be expected that this situation will prolong until the end of this year, considering that the last two weeks of December are always reserved for a holiday season, hence, the markets and investors are mostly inactive.Total funds outflow from the beginning of this year remained flat at level of $1.369B, which is a decrease of 63% on a yearly basis.
Crypto currencies were traded in a mixed mode during the previous week.
Absolute winner of the week was Bitcoin , who added $4B to its market cap, increasing it by 1.3%.Ether performed almost without any change on a weekly basis, as well as other major coins on the market.In a relative sense, the coin with the highest weekly increase in market cap was EOS , who surged by 11%.NEO and DASH also had a good week, with an increase in cap by more than 4%.On a losing side was LINK, which lost 6.7% in value, followed by DOGE, Theta, Polkadot and Algorand, which decreased their market cap by more than 4%.Considering coins in circulation, Filecoin continues to beat records, by adding 1.5% more coins in circulation during the previous week.
Crypto futures market
In line with incremental changes on the spot market, the crypto futures market performed in the same manner during the previous week.
BTC short term futures were almost unchanged compared to a week before, holding quite modestly above $17K.Longer term maturing BTC futures were up by 1.6%, but still ending the week at $17K.
ETH short term futures were down by 2.8%, with December this year ending the week at level of $1.250.
Longer term futures remained flat during the course of the week, where December 2023 was traded at level of $1.220.
Both BTC and ETH futures continue to trade with price inversion.During the previous week the difference in prices between maturities from December this year and December 2023 were further decreased, implying that the market continues to be on hold when it comes to price expectations for both BTC and ETH during the course of the next year..
