Crypto Weekly: 16 – 22 January 2023
Bitcoin prices have rallied by more than 10% over the past week, likely supported by the recently released December inflation/CPI figure of 6.5%, which is lower than the previous month. Improving inflation figures have fuelled expectations that the FED will begin to slow its interest rate hikes. Asides from the CPI release, the negative news surrounding the crypto sector seems to have started quieting down as the media cycle moves on to other topics. In addition to Bitcoin, other altcoins are also gaining momentum, particularly Layer 1 blockchains and Metaverse-related projects, which are seeing significant rallies.
El Salvador’s Legislative Assembly approved a law on the issuance of digital assets, paving the way for the Bitcoin bonds championed by President Nayib Bukele. The new law establishes the legal order granting legal certainty to transfer operations of any kind of digital asset used in public offerings in El Salvador. It also creates a new government agency to administer El Salvador’s digital assets. All digital asset service providers in the country will be required to complete registration with the El Salvadorian government.
Samsung Asset Management Hong Kong, a subsidiary of Samsung’s investment arm Samsung Asset Management, has listed the “Samsung Bitcoin Futures Active ETF” on the Hong Kong stock market on 13 January. The move comes amidst growing interest and gives institutional and retail investors exposure to Bitcoin. Currently, Hong Kong is the only market in Asia where Bitcoin futures ETFs can be traded.
Amazon Web Services will be partnering with Ava Labs, developer of the Avalanche blockchain, to drive mass adoption and help bring blockchain technology to enterprises, institutions, and governments at scale. The partnership with AWS will make it easier for developers to develop dApps and launch and manage nodes on the Avalanche blockchain.
The founder of Gala Games shared the new roadmap for the Gala Games platform, which outlined notable changes to the mechanics/tokenomics of GALA, including the implementation of a burn mechanism, the development of Gala’s own Layer 1 blockchain, as well as recent acquisition of mobile gaming company Ember Entertainment. Additionally, Gala is reportedly partnering with Dwayne “The Rock” Johnson and Mark Wahlberg; however, an official launch of the collaboration is set to be announced, leading to the deletion of a tweet that had revealed the news earlier.
A report by Citi Research claims that activity on the Solana blockchain remains high, even though an estimated 50 million SOL remains locked in crypto exchange FTX’s Chapter 11 bankruptcy proceedings. While SOL circulating supply has been drastically impacted, several key metrics, such as active addresses and daily NFT volume, have returned to pre-FTX-collapse levels, potentially indicating comfort from some users on the chain.
Sky Mavis co-founder Aleksander Larsen, the team behind play-to-earn game Axie Infinity, told Cointelegraph that he believes it’s just a matter of time until major game studios/publishers enter the P2E space. However, Larsen also notes that he thinks these firms will hold off until they see a game generating billions in revenue. When asked to reflect on the status of P2E and GameFi, Larsen stated that it does not work in its current state. Games need to be fun first with a solid economy backing, which can enable some players to earn.
Weekly Technical Analysis: 16 – 22 January 2023
BTC has rallied and is continuing to create higher lows, with support set at its previous resistance at $18,200. If support can remain intact, BTC may manage an upwards reversal. BTC will look to challenge resistance at the $25,000 level; however, there may be a slight correction in the short term if RSI indicates that BTC is being overbought.
ETH is amidst a strong rally and will look to challenge the $2,000 resistance level this week. However, this sharp price surge may mean that a short-term price correction is around the corner. Keep an eye on the support level at $1,500; if it can remain intact, ETH can sustain its current recovery.
SRM is up by +168% over the past week. Keep an eye on whether SRM’s support at 12 baht can remain intact this week. If SRM is able to sustain its rally, it will be looking to challenge its resistance level at 24 baht. However, considering the drastic price jump we have already seen, SRM’s performance may begin to slow soon.
MANA is up by +73.3% over the past week, breaking through last week’s resistance level at 16 baht, which is now MANA’s support moving forward this week. If support can remain intact, MANA will likely be able to sustain its short-term uptrend. MANA will look to test resistance at 27 baht; however, its rapid rally may lead to a correction soon.
Trading and Investment Considerations For The Week
The crypto market seems to be rallying after the release of US December inflation figures. With inflation on the decline, some FED officials have even come out to say that a lower interest rate hike of 0.25% can be expected by the next FOMC meeting. Additionally, FUD appears to be dying down, with the negative press surrounding the crypto industry finally starting to quiet. These factors have led many to speculate over whether the market has found its bottom and whether buying pressure is about to increase.
Despite the optimistic signs, it is critical to keep a close eye on the next FED meeting on 1 February 2023 and whether the hoped-for 0.25% interest rate hike comes to pass. Furthermore, earning reports for companies in the US market will be released throughout the next two months; if the reports indicate that the market is performing well, this could further boost the crypto market in Q1 of 2023.
It is best to consider the market to be in a mini rally at the moment. There is still a lack of positive factors that suggest this rally can be sustained. During this period, some traders may choose to speculate on tokens that have dropped by more than 80-90% over the past year; however, the fact that the market is not properly bullish yet means that a high degree of caution should be exercised when trading.
Keep an eye on the support levels of tokens that are looking to break out. If support remains intact and the prices don’t make new lows, a recovery is possible; however, if support cannot remain intact, the market is likely prepared to cut losses.
-Cryptocurrency and Digital tokens are highly risky; investors may lose all investment money. Investors should study information carefully and make investments according to own risk profile.
– Past Returns/Past Performance does not guarantee future returns/performance.
*Materials on Bitazza Weekly Newsletter are intended to be used and must be used for informational purposes only. The views, information, or opinions expressed are solely those of the individuals involved and do not necessarily represent those of Bitazza and its employees. The information contained herein is not intended to be a source of advice or financial analysis with respect to the material presented, and the information and/or documents contained in this website do not constitute investment advice.
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