Week 4 | 1/24/22 - 1/29/22
By Matthew BrienenNews Flash
Monday 1/24/22: Fantom has overtaken the Binance Smart Chain (BSC) to become the third-largest crypto protocol in decentralized finance with over $12.2 billion total value locked (TVL) across its ecosystem. This ghostly named protocol belongs to the new generation of proof-of-stake blockchains looking to compete with Ethereum by solving scalability problems like the cost of transactions, throughput, and time to finality.
Tuesday 1/25/22: Russia’s central bank last week said Bitcoin mining and transactions should be banned; this news was quickly reversed when the finance ministry today said the country needs to “regulate, not prohibit” crypto. The central bank's reasons for banning Bitcoin mainly revolved around environmental concerns. Bitcoin is notoriously energy intensive—and Russia's miners provide more than 10% of the computing power to the Bitcoin network.
Wednesday 1/26/22: FTX US, the United States-based division of the rising cryptocurrency exchange, announced today that it has raised a $400 million Series A funding round at a valuation of $8 billion. The U.S. arm of FTX plans to expand its derivatives offerings, add stock trading, and provide NFT game infrastructure.
Thursday 1/27/22: The SEC has rejected another application for a spot market Bitcoin ETF—this time from asset manager Fidelity. The U.S. regulator said in a Thursday note that the application for Fidelity’s Cboe BZX Exchange did not give sufficient evidence on how it would prevent fraud. The SEC has given the exact same reason for previous rejections.
Friday 1/28/22: Crypto.com has teamed up with the Lebron James Family Foundation to bring Web3 education to the star athlete’s hometown of Akron, Ohio. The multi-year deal, the terms of which were not disclosed, means that Crypto.com will not only financially support the foundation’s I PROMISE program, but it will also develop Web3-specific content for students who want to get a head start on the nascent blockchain industry. “Blockchain technology is revolutionizing our economy, sports and entertainment, the art world, and how we engage with one another. I want to ensure that communities like the one I come from are not left behind,” James said in a statement.
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Bitcoin Technical Recap
Bitcoin took a little Sunday drive to visit the $33,000 handle, only to reverse sharply. We saw price rally from this zone as much as 13% off the lows. BTC seems to have found some minor support atop the $35,200 region. Although this recent rally is optimistic the next logical move, assuming we're not done with this support band, would be another sweep of the lows in the $33,000 region. A strong break above both the black trendline & the $40k mark will entice more retail traders to join the party.
BTC/USD Daily Chart
We discussed what the last 2 bottoming structures looked like for BTC before seeing a reversal higher: multiple sweeps of the lows, loads of wicks & rejection from the downside, & general volatility. Banks & institutions don't want retail traders to be a part of their moves.
BTC/USD 2-Day Chart
A glimmer of optimism has appeared with a key on-chain metric flashing a very bullish sign. Examining whale balances, characterized by known entities who hold 1,000 or more Bitcoin in their wallets, we can see that whales stepped in strongly, aggressively buying this latest dip. The whale balances are illustrated below with the green line; the last time we saw this type of whale demand was when Bitcoin was peaking in February & March of 2021.
Ethereum Technical Recap
ETH took the plunge alongside BTC last weekend, touching as low as $2,150 on some exchanges. We saw a sharp reversal akin to Bitcoin, however Ether is having a much more difficult time breaking above minor resistance located at ~$2,500. Minor support lies at $2,300 however, anything in this green band is fair game & would not provide definitive direction either way.
ETH/USD Daily Chart
Market Dominance Outlook
On Friday's stream we discussed some weekly dominance charts & made the case for a rotation into altcoins possibly being afoot. In the 3-panel chart below, we examined these dominance charts left to right working through Bitcoin dominance, Ethereum dominance & XRP dominance. The recent bounce in BTC dominance comes from traders flocking from other digital assets to BTC for "safety" as the markets capitulated last weekend. A further rally towards higher percentage market share for BTC is likely, perhaps even as high as 45%. From a more macro perspective, the bear flag is still intact. A strong break below the 40% region will send altcoins on a rampage. Ethereum dominance is clinging on for dear life to its bull flag that has been intact since May of 2021. A drop in BTC dominance would allow this structure to flourish bullishly once more. This would also queue up XRP dominance to break its massive pennant structure that's been forming since October of 2021.
Weekly Dominance Charts
Project Breakdowns & Daily Update Recaps
Didn't catch all the daily update streams? We've got you covered with highlights & links to the full episodes. Monday 1/24/22: Brian Decker provided an update on the market and reveals the truth about HEX; we have determined that this project is, in fact, a Ponzi scheme. Matthew Brienen showed you how to stake CSPR for a cool 10.5% APY & the long-term hold plan. Finally, the team discusses some coins in which they are willing to engage and what the charts indicate for those coins.
Tuesday 1/25/22: Brienen & Decker discuss crypto investment funds, Bitcoin regulation in Russia, & other bullish news including the CEO of YouTube hinting at NFT integration, small banks gearing up to launch Bitcoin trading, and Ripple NDAs. Brian introduced Crypto.com ($CRO) as well as criteria that defines a bear market.
Wednesday 1/26/22: Dan Habib, EVP of MBS Highway, brought a presentation on what happened in the market today, a summary of loose lipped Jerome Powell's comments, and a speculative look at the future of Bitcoin and Ethereum over the next decade.
Thursday 1/27/22: Matt discussed the rumors of what might be inside the Biden administration upcoming executive order, metaverse concerts, and the SEC's rejection of Fidelity's Spot Bitcoin ETF. The remainder of the session consisted of a tutorial of staking API3 for 25% APY, as well as an introduction to crypto oriented real estate company Propy.
Friday 1/28/22: Analyst Brienen closed out the week discussing news such as LeBron James and Crypto.com collaborating, Fidelity filing two more ETFs for the metaverse, and a bill introduced in Arizona to make Bitcoin legal tender. He also delves into the stock indices, Bitcoin and Ethereum charts, macro dominance charts, as well as some prime altcoin opportunities.