Crypto Weekly: 19- 25 December 2022
The Federal Reserve has announced that it is raising interest rates by another 0.5%, following four consecutive 0.75% rate hikes. This move is seen as a response to the improving economic conditions, however, the FED has indicated that it will continue to monitor economic conditions and make adjustments to interest rates as needed to combat inflation.
The Bank for International Settlements (BIS) has announced a new policy that will allow banks to hold up to 1% of their reserves in cryptocurrency. The policy will go into effect on the first of January 2025 and outlines various facets of how crypto assets are to be categorized and treated. The new policy could potentially pave the way for the wider adoption of digital assets by financial institutions.
French auditing firm Mazars Group has paused work for all clients related to cryptocurrency globally. The company will also remove the names of these clients from its website. Some of the exchanges that use Mazars’ services include Binance, KuCoin, and Crypto.com.
Stablecoin issuer Tether has responded to criticism regarding the company’s financial stability by announcing that it will no longer offer secured loans by the end of 2023 and will instead focus on unsecured lending. Secured loans is a practice in which the company lends out its own stablecoin (e.g. USDT) rather than selling the tokens outright for cash. According to Tether’s website, these loans made up $6.1 billion, or 9%, of its reserves as of September 30th. Tether claims that these loans are overcollateralized by “extremely liquid” assets, but has provided few details about the exact nature of that collateral or the identities of its borrowers. Tether’s announcement comes amid concerns about the sustainability of stablecoin models and the potential risks they pose to the broader cryptocurrency market.
SushiSwap has revealed that the DEX platform has lost around $30 million on liquidity provider (LP) incentives over the past 12 months. LP incentives are rewards paid to users who provide liquidity to a DEX by adding their tokens to a pool. While the high LP incentives were necessary to attract liquidity to the platform when first launched, they will likely be reduced going forward to ensure sustainable growth as SushiSwap shifts its focus to improving the user experience and developing new features on its platform.
Leading DEX protocol Curve Finance has announced that it will be deploying on ZKSync’s mainnet in 2022 and marks the first time Curve will be deployed on a ZK-rollup. ZKSync is a scaling solution that allows users to interact with Ethereum more efficiently and cost-effectively by using zero-knowledge proofs. The deployment on ZKSync’s mainnet will allow Curve to offer its users faster and cheaper trades, as well as access to a wider range of assets.
Weekly Technical Analysis: 19 – 25 December 2022
BTC is showing signs of losing its short-term upwards momentum. If it cannot stand above the $17,500 resistance level there is a distinct possibility that prices can continue to fall. Keep a close eye on if prices approach the $16,000 zone and be ready to cut losses if the support level at $15,500 cannot remain intact. BTC will likely have to surpass the $20,000 level to see a true upwards recovery.
แนวรับ 560,000 บาท แนวต้าน : 600,000 บาท
Support : 15,500 USD Resistance : 17,500 USD
ETH may be losing its short-term uptrend this week. If its support at $1,151 cannot remain intact, ETH may see a correction that can push prices as low as $1,076. If ETH can stave off a correction, it will look to challenge its initial resistance level at $1,300, with a subsequent resistance at the $1,500 area.
IMX is down by only -2.2% from last week, making it one of the best-performing tokens coming into this week. Keep an eye on if prices continue falling and if they fall past their previous low of 13.80 baht. IMX will have to break through its resistance at the 15.60 baht level before it can rally into an uptrend. Caution when trading is advised, as IMX’s overall trend remains bearish.
RUNE is down by -3.6% from last week, a solid performance compared to the rest of the market. RUNE may continue to recover if prices can remain above the 44 baht level. If RUNE’s support can remain intact, there may be an opportunity for short-term profit-taking at the 50 baht level.
Trading and Investment Considerations For The Week
Declining US inflation figures in November gave the FED the necessary confidence to reduce its interest rate hikes to 0.5% after four consecutive sessions of 0.75% rate hikes. Jerome Powell’s post-meeting statement had little effect on markets as most investors had already absorbed the news and made their moves prior to the statement by the FED chair itself.
Additionally, over the past week, the ongoing FUD surrounding Binance has put a damper on the crypto market overall causing a marketwide correction that could pressure investors until the end of this year.
The US stock market is still recovering from the very real fear of a potential recession earlier this year. It, therefore, seems unlikely that we will see a Santa Claus rally at the end of this year, also meaning that the crypto market will likely remain stagnant for the time being.
During this end-of-year period, it is likely we will not see any unexpected news that could spark a rally or spur greater market activity. Therefore, one possible approach when investing is to identify and gradually accumulate tokens that have proven strong enough to not create lower lows. In contrast, investors should consider refraining or slowing down investments into tokens that have proven unable to refrain from creating lower lows.
-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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