Mois : janvier 2022

Cryptocurrencies are starting to stabilize after declining sharply over the past week. Some indicators show investor sentiment at extremely bearish levels, which typically precede periods of buying activity. Other technical measures, however, suggest choppy price action could persist over the short term.

Bitcoin returned to above $35,000 and was up 3% over the past 24 hours, versus a 5% decline in SOL and roughly flat performance in ETH over the same period.

Still, it might be too soon to call a price bottom. « I think the determination of a bull/bear market is not as clear as previous cycles, due to the structure of the market changing drastically with institutions entering the space, » Marcus Sotiriou, an analyst at the U.K.-based digital asset broker GlobalBlock, wrote in an email to CoinDesk.

« Now, it is apparent that bitcoin is in a ranging environment (between $29,000 to $69,000 approximately) rather than a trending environment, » Sotiriou wrote.

« Bitcoin’s recovery is a long shot as investors are more keen on the price being stabilized for now, » Alex Axelrod, founder and CEO of Aximetria, a crypto financial services firm, wrote in an email to CoinDesk. Axelrod is monitoring BTC price levels of between $32,000 and $40,000 for confirmation of a breakdown or breakout.

Latest prices

The chart below shows the recent increase in bitcoin’s spot trading volume. Short-term traders have been active despite the uncertainty regarding future price direction.

Short-term holders underwater

Losses are adding up for most short-term bitcoin holders, according to blockchain data.

The chart below indicates that 18% of short-term bitcoin holder supply is at a loss (BTC trading below its average cost basis), which could point to further selling. A similar scenario occurred during the 2018 bear market and subsequent price corrections.

Still, long-term bitcoin holders appear unfazed by the recent price dip. « The proportion of long-term holder supply has actually returned to a modest uptrend, which indicates a general unwillingness for this cohort to liquidate, » Glassnode, a crypto data firm, wrote in a blog post on Monday.

Crypto funds attract fresh capital

Inflows into digital-asset funds last week – after five straight weeks of outflows – suggest investors were taking advantage of the price dip.

Cryptocurrency funds brought in $14.4 million of new investor money during the seven days through Friday, ending a streak of five straight weeks of outflows, according to a report Monday from the digital-asset manager CoinShares.

Last week’s inflows were led by bitcoin-focused funds, which brought in $13.8 million. Meanwhile, ethereum-focused funds suffered $15.6 million of outflows. Read more here.

Altcoin roundup

Solana Slides 17% to lead losses amid crypto market plunge: Major cryptocurrencies fell as much as 17% in 24 hours as the crypto market followed a broader decline in U.S. stock index futures on Monday. Last Friday, traders complained about network congestion on Solana and doubted its ability to attract real capital with that kind of meltdown. Solana has been attractive to large trading shops partly because it has prioritized scale. Still, when the network gets overcrowded, it has shown that it can stall out. Read more here.Luxor tries to keep Proof-of-Work Mechanism on Ethereum: Crypto software and services company Luxor is launching an Ethereum mining pool even as it is planning to abolish mining from its network. The company is working with large institutional miners, including Hut 8 and several retail miners in North America, to provide a U.S.-based Ethereum mining pool, the company said in a statement on Monday, according to Aoyon Ashraf. Read more here.OpenSea bug allows attackers to get massive discount on popular NFTs: A bug on the non-fungible tokens (NFT) marketplace OpenSea has allowed at least three attackers to secure massive discounts on several NFTs and make a huge profit. The bug, which was discovered as early as Dec. 31, allowed the attackers to buy NFTs at older, lower prices, and sell them for a hefty profit, according to Eliza Gkritsi. Read more here.

Relevant news

Coinbase Taps SEC Counsel Thaya Knight to Manage Public Policy TeamBank of America Says US CBDC Would Preserve Dollar’s Status as World’s Reserve CurrencyChinese Government Rejects Metaverse Trademark Applications: ReportSingapore VC Blockchain Founders Raises $75M for New Fund

Other markets

Most digital assets in the CoinDesk 20 ended the day lower.

Largest gainers:

Asset
Ticker
Returns
Sector
Cosmos
ATOM
+17.5%
Smart Contract Platform
Stellar
XLM
+10.9%
Smart Contract Platform
Litecoin
LTC
+9.8%
Currency

Largest losers:

Asset
Ticker
Returns
Sector
Solana
SOL
−3.0%
Smart Contract Platform
Filecoin
FIL
−1.5%
Computing
Polygon
MATIC
−1.2%
Smart Contract Platform

Sector classifications are provided via the Digital Asset Classification Standard (DACS), developed by CoinDesk Indices to provide a reliable, comprehensive, and standardized classification system for digital assets. The CoinDesk 20 is a ranking of the largest digital assets by volume on trusted exchanges.

The global crypto market lost over $1 trillion in value last week as the price of nearly every major token took a precipitous nosedive.

ETH, the native asset of the Ethereum network, is down to around $2,200 for the first time since July. Bitcoin hit a similar six-month low in the $33,000 range. Altcoins SOL, DOT and AVAX are all down around 40% just in the last seven days.

This article is excerpted from The Node, CoinDesk’s daily roundup of the most pivotal stories in blockchain and crypto news. You can subscribe to get the full newsletter here.

With a dip in the market comes a wave of “takes” from crypto’s armchair prognosticators. Depending on whom you trust, these are either short-term macro trends (tech stocks like Peloton and Netflix are way down, too) or the first rumblings of a promised “crypto winter,” the kind of thing last seen during the post-crash environment of 2018.

Well, here’s another take – it’s a bad time to be a day trader, but it’s also a bad time for NFT flippers, whose gains and losses are typically priced in ETH. Even as the price has fallen, the average amount of ETH exchanged for non-fungible tokens in top collections has stayed relatively consistent.

The Consumer Price Index (CPI), which tracks an aggregate price of certain consumer goods, is a useful real-world analog here. People like to think of the CPI as a rough gauge for inflation – when the dollar is worth less, you’d expect dollar-denominated prices to go up. It rose 7% in 2021, through December, in the biggest spike since 1982.

That is to say, you’re probably going to be paying a little more for some of the consumer goods you use everyday.

Somehow, this logic doesn’t seem to apply to crypto’s top NFT collections.

A week ago, the “floor prices” (the lowest listed price for a token in a given NFT collection) for CryptoPunks and the Bored Ape Yacht Club, now the two priciest projects in the space, were 60 ETH and 82 ETH, respectively.

They’ve each crept up a little, from 60 ETH to 66, and 82 ETH to 86 – but these minor increases aren’t doing much to offset the massive dip in the price of ETH, which lost 30% of its value over the past seven days.

See also: The History of HODL

The same goes for other top NFT collections. The floor for Meebits, a 3D collection from the developers of CryptoPunks, has actually dropped over the past week, as has the floor for CyberKongz.

Average sale prices for tokens over the past seven days tell a similar story; minor increases and decreases here and there, but nothing that could really offset the dip.

Gm to everyone who just makes ETH natively within the economy and never even needs to buy the dip 👀 https://t.co/PlLd09bU0B

— dame.eth (@damedoteth) September 7, 2021

So, why is everyone accepting less for these valuable NFTs across the board?

My sense is that it has to do with who’s actually buying this stuff. At this point, CryptoPunks and Bored Apes are the domain of hardcore crypto enthusiasts (VCs, full-time investors) and rich celebrities. Your average ETH trader, maybe a little less risk tolerant, probably isn’t focusing on these collections.

Hardcore ETH people tend to think of ETH on its own terms. Spend enough time in crypto and 1 ETH just starts to look like 1 ETH, as opposed to $2,200.

Gm to everyone who just makes ETH natively within the economy and never even needs to buy the dip 👀 https://t.co/PlLd09bU0B

— dame.eth (@damedoteth) September 7, 2021

If you really believe in the thesis behind NFTs (and, by extension, the ETH backing most of the market), you believe in the viability of the tokens themselves. And if ETH is going up and we’re all going to the moon, you may not care about a short-term price correction.

What looks like a loss today could be seen as a bet on the long-term value of ETH. Nothing’s ever real until you sell, right?

For now, JPEGs are on sale, baby.

Italian luxury fashion brand Gucci is the latest to edge its way into Web 3 with the upcoming drop of 10 non-fungible tokens (NFT) beginning Feb. 1.

The NFTs have been created in collaboration with the cult toy brand Superplastic and co-designed by Gucci’s head of design, Alessandro Michele. Each NFT will be given away with a ceramic sculpture handmade in Italy and co-designed by Gucci. The NFT drop will be Gucci’s first.

Superplastic is a company that makes artistic vinyl toys for the collectibles market and has issued NFTs through the Winklevoss-owned Nifty Gateway. Superplastic was launched in 2018 by Kidrobot founder Paul Budnitz and has sold millions of dollars in designer toys and apparel based on characters Janky & Guggimon, Dayzee & Staxx, Kranky, ShüDog.

On Friday, Gucci tweeted about the roadmap and launch of a Discord channel as a place to encourage open conversations with the community about what’s next in the metaverse.

Digital fashion momentum

In May, designer fans were left stunned when a virtual Gucci Dionysus bag was sold on the gaming platform Roblox for 350,000 Robux, or roughly $4,115 at the time. The same physical purse cost $3,400.

Reddit co-founder and VC investor Alexis Ohanian was quick to point out in a tweet, “Remember: this Roblox purse is not an NFT and thus has no value/use/transferability outside the Roblox world – yet it’s worth more than the physical one.”

The Superplastic collaboration seems to represent a change of course.

Read more: Prada, Adidas Launch NFT Project on Polygon

Luxury fashion brands are already making millions of dollars from auctioning NFTs. In September, Dolce & Gabbana launched its NFT collection, Collezione Genesi, which fetched approximately $5.65 million in a sale.

With more fashion brands launching NFTs, many are asking if this is a transformational moment for the fashion industry or merely a bout of trendhopping.

Luxury fashion brand Prada and sportswear giant Adidas announced last week the launch of an NFT project built on the Polygon network that allows fans to contribute their own designs.

Morgan Stanley predicts the total NFT market is expected to grow to $300 billion by 2030 with brands such as Gucci and Balenciaga in the best position to profit from digital collaborations in the metaverse.

So far, the Gucci endeavor does not include an activation in popular open metaverses such as The Sandbox and Decentraland.

John Lennon’s son Julian is selling a collection of Beatles memorabilia as a set of non-fungible tokens (NFT).

The centerpiece of the « Lennon Connection » is some notes jotted by Paul McCartney while writing « Hey Jude, » one of the Beatles’ most famous songs. The song was said to be penned by McCartney to comfort the young Julian during his parents’ divorce.

The collection also includes clothing worn by John Lennon in the Beatles’ films and various guitars given to Julian Lennon by his father. The NFTs take the form of audio-visual collectibles, each accompanied with narration by Julian.

The auction will take place on NFT marketplace YellowHeart on Feb. 7. YellowHeart is a startup that uses Ethereum and Polygon integrations to offer tickets and other music-related items as NFTs. Last March, it hosted the release of Kings of Leon’s album as an NFT, a first for a rock band.

NFTs saw a dramatic surge in interest in 2021, with trading volume reaching $10.7 billion in the third quarter, driven by a record-breaking August that saw over $5.2 billion in trading.

The availability of NFTs related to the Beatles, one of the most iconic rock bands of all time, may trigger renewed attention toward the use of the technology for the sale of music-related memorabilia.

Julian is not the first member of the family to be associated with crypto and blockchains. His half-brother Sean Ono Lennon has made himself known as a bitcoin advocate, saying in a podcast in November 2020 that the world’s largest crypto is « one of the only things » that gives him optimism about « the future and humanity in general. »

Read more: Music NFTs Are Set for an Explosive 2022

Non-fungible tokens (NFT) marketplace OpenSea launched a new listing manager, among other measures, to mitigate a user interface flaw that saw over $1 million worth of NFTs sold at prices far below their market value.

On Monday, three attackers were able to take advantage of the bug and buy popular NFTs at older, lower prices, and sell them for a massive profit.An OpenSea spokesperson told CoinDesk via email that « this is not an exploit or a bug » but rather « an issue that arises because of the nature of the blockchain. »The marketplace launched a new listing manager early on Tuesday, adding a dashboard that shows all of one user’s inactive listings where they can cancel each listing with one click. »The fix only handles and solves for new users, as it only fix the facade (web app) and not the vulnerable contract itself, » said Tal Be’ery, chief technology officer of crypto wallet ZenGo, told CoinDesk via Twitter. « Old users that re-listed their NFTs on OpenSea in the past are still vulnerable to such attack, » whereas new users « simply cannot re-list NFTs without cancelling previous lists explicitly, » he added.On top of the new dashboard, OpenSea has been reaching out to and reimbursing affected users, the spokesperson said, adding that they have not « communicated broadly about this issue » to avoid bringing it to the attention of bad actors.OpenSea also changed its default listing duration from six months to one month, and started notifying users if they have an active higher price listing when they reduce the price for the same item, the marketplace told CoinDesk.In the next two days, OpenSea will ship another two features to address the listing issue, the company said. The first feature is that when a user transfers an NFT out of their wallet for which they have an active listing, OpenSea will notify them that the NFT in question is an active listing, giving the users an option to cancel the transfer. The second feature is to email users when they transfer an NFT into a wallet with an active listing for that NFT.

Read more: OpenSea Bug Allows Attackers to Get Massive Discount on Popular NFTs

UPDATE (Jan. 25, 19:11 UTC): Adds more details about OpenSea’s current and future changes in the last two bullet points.

A bug on the non-fungible tokens (NFT) marketplace OpenSea has allowed at least three attackers to secure massive discounts on several NFTs and make a huge profit.

The bug, which was discovered as early as Dec. 31, 2021, allowed the attackers to buy NFTs at older, lower prices, and sell them for a hefty profit. Blockchain analytics firm Elliptic wrote in a blog post that one attacker called jpegdegenlove « paid a total of $133,000 for seven NFTs – before quickly selling them on for $934,000 in ether. Five hours later, this ether was sent through Tornado Cash, a ‘mixing’ service that is used to prevent blockchain tracing of funds. »NFTs are digital assets on a blockchain that represent ownership of virtual or physical items. OpenSea is one of the largest marketplaces for NFTs.Elliptic estimates the market value of the affected NFTs to be over $1 million.Jpegdegenlove partially reimbursed two of the victims, sending them back a total of $75,000 on Monday, Elliptic said.Some users have been transferring their listed assets to other wallets to take them off the market place whilst avoiding the delisting fee, founder of NFT project freshdrops_io tweeted back in December.But even though the item may appear to be off the OpenSea front end, it is still accessible on OpenSea APIs and Rarible, another NFT marketplace.CoinDesk could not reach OpenSea for comment on this story.One NFT from the popular Bored Ape Yacht Club (BAYC) collection was listed under its July 2021 price of 23 ether, and the attacker was able to sell it for 135 ether, making a quick profit of more than 100 ether, tweeted Tal Be’ery, Chief Technology Officer of ZenGo crypto wallet.Asked about the bug, an OpenSea Discord admin confirmed to CoinDesk that « if you had an open listing that you never cancelled, or didn’t hit its expiration, it still exists. » »The thief had a bot to scan the blockchain for pending transactions that had low floor pending and bought them, » Joe Vargas, an influencer who also runs his own NFT project, told CoinDesk.Bored Ape Yacht Club, Mutant Ape Yacht Club, CyberKongz and Cool Cats NFTs have been affected.One collector, who saw their BAYC sell for 0.77 ether, went on Twitter to express his shock when he realized his NFT had disappeared.

Yooo guys! Idk what just happened by why did my ape just sell for .77?????

— TBALLER.eth (@T_BALLER6) January 24, 2022

Read more: OpenSea Says It Patched an NFT Phishing Vulnerability

UPDATE (Jan. 24 17:56 UTC): Adds details from Elliptic’s analysis.

The Blockchain-Based Service Network (BSN), China’s state-sanctioned blockchain infrastructure project, said it is releasing its platform for non-fungible tokens (NFT) in the country today.

The BSN-Distributed Digital Certificate (BSN-DDC) network is a structure for building NFTs that is compliant with Chinese regulations, the organization said in a press release. Authorities in China discourage public networks like Ethereum that are commonly used in the NFT ecosystem.Instead, as CoinDesk reported in October, BSN is making 10 Open Permissioned Blockchains available on the BSN-DDC. These are localized versions of their permissionless counterparts that set restrictions on who can participate in network governance and use fiat currency for payment. DDCs are the same as NFTs, but renamed to emphasize their uses for certification.Five of the 10 chains were named: Ethereum-based Wuhan Chain, Wenchang Chain powered by Cosmos-based IRISnet, Corda-based Zunyi Chain, EOS-based Zhongyi Chain, and FISCO BCOS-based Tai’an Chain.Some platform partners were also announced: The state-owned museum and auction house Rong Bao Zhai Auction, state-backed Hainan International Culture and Artworks Exchange Center – which has acquired the first license for an NFT marketplace in China, consulting firm EY’s blockchain division, video technology provider Sumavison, electronic invoice provider Baiwang and Digital Art Fair Asia, an NFT-focused company from Hong Kong.Another 26 founding partners, as well as the roadmap and governance structure will be announced in a launch ceremony in the city of Nanjing in March.The BSN-DDC is based on the Blockchain Services Network, a platform where developers can build and deploy decentralized applications at a low cost.

Read more: BSN Architect Red Date to Launch NFT Infrastructure in China

Pluto Digital, a crypto venture company, agreed to buy investment company NFT Investments in a reverse takeover that will see it gain a listing on the Aquis Stock Exchange Growth Market in London.

NFT Investments (AQSE: NFT) will issue GBP96 million ($130 million) of shares to Pluto investors, giving them a 70.5% stake in the new entity, NFT Investments said in a statement.In the last 12 months, Pluto Digital has established Pluto V, a venture capital arm that has made investments in various Web 3 projects and non-fungible token assets. Last March, it raised a $40 million fund, attracting London-listed bitcoin miner Argo Blockchain (LSE: ARB) as its lead investor.NFT Investments’ executive chairman, Jonathan Bixby, is one of Argo’s founders.The firm is listed on the Aquis Stock Exchange Growth Market (AQSE) in London, trading on which will be suspended until the proposed acquisition is completed.

Read more: Crypto Miner Argo Diversifies Into Non-Mining Blockchain Business

Good morning. Here’s what’s happening:

Market moves: Bitcoin retakes $36,000 as the crypto market stabilized after last week’s correction.

Technician’s take: Extreme oversold readings preceded an uptick in BTC.

Catch the latest episodes of CoinDesk TV for insightful interviews with crypto industry leaders and analysis.

Prices

Bitcoin (BTC): $36,547 +0.1%

Ether (ETH): $2,426 -4.6%

Top gainers

Asset
Ticker
Returns
Sector
Cosmos
ATOM
+5.4%
Smart Contract Platform
Bitcoin
BTC
+0.7%
Currency

Top losers

Asset
Ticker
Returns
Sector
Solana
SOL
−8.5%
Smart Contract Platform
Algorand
ALGO
−7.3%
Smart Contract Platform
Filecoin
FIL
−6.4%
Computing

Sector classifications are provided via the Digital Asset Classification Standard (DACS), developed by CoinDesk Indices to provide a reliable, comprehensive, and standardized classification system for digital assets. The CoinDesk 20 is a ranking of the largest digital assets by volume on trusted exchanges.

Markets

S&P 500: 4,410 +0.2%

DJIA: 34,364 +0.2%

Nasdaq: 13,855 +0.6%

Gold: $1,843 +0.4%

Market moves

Bitcoin’s price rose by as much as $1,834 on a four-hour basis during U.S. trading hours on Monday, after it briefly touched the $34,000 level during Asia’s late afternoon. The overall crypto market stabilized after the broad market correction downward in the past week.

Bitcoin is currently changing hands at around $36,400 and is up slightly in the past 24 hours, according to CoinDesk data. At the time of publication, ether was down slightly, trading at about $2,400. Most of the major alternative coins (altcoins) were in the red.

The U.S. equity market also rebounded in the late afternoon on Monday. Major stock indices tumbled earlier in the day as investors closely watch the Federal Reserve’s first meeting this year, which will take place this week.

While bitcoin and the crypto market appeared to be following the performance of the stock market recently, as CoinDesk reported, the relationship between bitcoin and the Nasdaq 100 stock index, the favored proxy for the tech sector, remains weak – a reminder there are other more important factors that could affect bitcoin and the crypto market.

“For the time being at least, one could say bitcoin’s prices are a combination of some global risk appetite and a lot of the market dynamics in China (and the aftermath of restrictions there),” CoinDesk’s Lawrence Lewitinn wrote. “Those factors’ influences aren’t static, but they explain a lot more than watching the Fed’s every move.”

According to crypto trading data analytic firm Kaiko, despite a sharp sell-off last week, bitcoin’s daily spot trading volume last week was still lower than it was during December’s price plunge.

The average daily spot trading volume of bitcoin on major cryptocurrency exchanges has mostly remained below $5 billion in the past month, down significantly since early fall, Kaiko wrote in its weekly newsletter on Monday. This is partly because Chinese exchanges OKEx and Huobi have suffered volume loss due to the crypto trading ban in China last year.

Technician’s take

Bitcoin Short-Term Bounce Faces Resistance at $40K

Bitcoin (BTC) returned above $35,000 after multiple oversold signals appeared on the charts. The cryptocurrency faces initial resistance at $40,000, which could limit upside over the short term.

Bitcoin is up 3% over the past 24 hours after rising from an intraday low near $33,000, while the broader crypto market has stabilized.

The relative strength index (RSI) on the daily chart registered the most extreme oversold reading since the March 2020 crash. The previous extreme low was on Nov. 20, 2018, which preceded a few months of rangebound price action before a rally took place.

For now, a downtrend of lower price highs since November remains intact, which means sellers could remain active at resistance levels.

Important events

8:30 a.m. HKT/SGT (12:30 a.m. UTC): Australia consumer price index (Q4, MoM/YoY)

8:30 a.m. HKT/SGT (12:30 a.m. UTC): National Australia Bank’s business conditions (Dec)

8: 30 a.m. HKT/SGT (12:30 UTC): National Australia Bank’s business confidence (Dec)

Happy Australia Day!

11 p.m. HKT/SGT (3 p.m. UTC): U.S. Consumer Confidence (Jan.)

CoinDesk TV

In case you missed it, here is the most recent episode of « First Mover » on CoinDesk TV:

Crypto Market Lost $1.3T in 2 Months; What’s Going On? White House Set to Release Government-Wide Strategy for Digital Assets

« First Mover » hosts were joined by Marc Lopresti, managing director at The Strategic Funds, for an in-depth analysis on the crypto markets as cryptocurrencies suffer yet another sell-off. Since November, about $1.3 trillion has been wiped out in the total market cap. Plus, what could we expect from the Biden administration’s digital asset strategy that’s reportedly set to release next month? Nyca Partners Executive-in-Residence Matt Homer and CoinDesk Managing Editor for Global Policy & Regulation Nikhilesh De provided their insights. Then CoinDesk Executive Editor Marc Hochstein explained Privacy Week at CoinDesk.

Latest headlines

Singapore VC Blockchain Founders Raises $75M for New Fund: The company has been an early investor in blockchain, crypto, Web 3 and metaverse startups.

Chinese Government Rejects Metaverse Trademark Applications: Report: Those rejected include applications by NetEase, iQiyi and Xiaohongshu.

Investors Put $14M Into Crypto Funds Last Week as Bitcoin Market Cratered: Inflows into digital-asset funds last week – after five straight weeks of outflows – suggest investors were taking advantage of the price dip.

Bank of America Says US CBDC Would Preserve Dollar’s Status as World’s Reserve Currency: CBDC’s are an inevitable evolution of today’s electronic currencies, the bank’s analysts said.

Biden Administration to Release Executive Order on Crypto as Early as February: Report: The directive will ask federal agencies to determine the risks and opportunities posed by digital assets.

Longer reads

Who Writes the Story of the Metaverse?: How narratives and memes shape our online future.

Today’s crypto explainer: Crypto Flash Crashes: What You Need to Know

Other voices: Blockchain beyond the hype: What is the strategic business value?

Said and heard

« Surveillance economies power our biggest tech companies. Facebook and Google track our every step to deliver surgical ad strikes that make us hungry to buy more stuff we don’t need, with money we don’t have, to impress people we don’t even know. They track where we go, what we like, who we know and love, and with whom we’re sleeping. » (Author and speaker Daniel Jeffries writing for CoinDesk) … « Well, here’s another take – it’s a bad time to be a day trader, but it’s also a bad time for NFT flippers, whose gains and losses are typically priced in ETH. Even as the price has fallen, the average amount of ETH exchanged for non-fungible tokens in top collections has stayed relatively consistent. » (CoinDesk media and culture reporter Will Gottsegen) … « That is the promise of a virtual world: that you get to be anybody you want, unhampered by flesh, gravity, environment, expectations and economics — or maybe just the record you have created. » (Vanessa Friedman/The New York Times) …

Good morning. Here’s what’s happening:

Market moves: Bitcoin was trading at over $36,000 on Sunday after continuing its recent decline earlier in the weekend.

Technician’s take: BTC is stabilizing on intraday charts, although $30,000 is a more significant level to watch given the decline in long-term momentum.

Catch the latest episodes of CoinDesk TV for insightful interviews with crypto industry leaders and analysis.

Prices

Bitcoin (BTC): $36,202 +3.4%

Ether (ETH): $2,532 +5.4%

Top gainers

Asset
Ticker
Returns
Sector
Cosmos
ATOM
+3.4%
Smart Contract Platform
`

Top losers

Asset
Ticker
Returns
Sector
Internet Computer
ICP
−9.2%
Computing
Litecoin
LTC
−9.2%
Currency
Filecoin
FIL
−9.0%
Computing
`

Sector classifications are provided via the Digital Asset Classification Standard (DACS), developed by CoinDesk Indices to provide a reliable, comprehensive, and standardized classification system for digital assets. The CoinDesk 20 is a ranking of the largest digital assets by volume on trusted exchanges.

Markets

S&P 500: 4,397 -1.8%

DJIA: 34,265 -1.3%

Nasdaq: 13,768 -2.7%

Gold: 1,834 -0.2%

Market moves

Bitcoin capped a forgettable three days, dipping below $34,400 at the start of the weekend, before mounting a small comeback on Sunday.

At the time of publication, the world’s largest cryptocurrency by market capitalization was trading well above $36,000, a nearly 3.4% gain over the previous 24 hours but well off its all-time high near $69,000 set in early November. Trading volume was light with many investors continuing to assess troubling economic conditions and a pronounced decline in equities markets.

The tech-heavy Nasdaq fell 2.7% on Friday as investors continued to veer away from stocks that led recent years’ charge in stocks. Two other major indexes, the Dow Jones Industrial Average and S&P 500 fell 1.3% and 1.8%, respectively. The market slump has stemmed from widespread concerns about interest rates, supply chain inefficiency and the ongoing coronavirus, which has been gathering strength in many parts of the U.S. even as it wanes in others.

Ether dipped below $2,400 on Saturday before returning to a base camp above that level, where spent the remainder of the weekend. At the time of publication, the second-largest crypto by market cap, was trading above $2,500, an almost 5.5% rise. Most of the major altcoins spent Sunday in the red.

« The market is holding its breath as investors look to the opening of the Asian markets for a sign of what equities will do this week, » Joe DiPasquale, the CEO of crypto fund BitBull Capital, told CoinDesk. « If Asian markets open strong, we can expect demand for crypto to go up, and even more so if the U.S. markets have a strong Monday.

DiPasquale added that « crypto is still finding its way as to whether it is a digital gold-like hedge that moves inversely with equities, or whether it’s a risk-on asset that will fail if equities continue to fail on Monday as many equity indexes did on Friday. While those most bullish on the investment case for crypto cite longer-term data that point to bitcoin not being correlated with other asset classes, data over the last two years has shown a correlation in the price of bitcoin and equities. »

Technician’s take

Bitcoin Sell-Off Deepens Below $40K; Minor Support Nearby

Bitcoin (BTC) failed to hold short-term support at $40,000 as sellers maintained the two-month long downtrend.

Intraday oversold signals were not enough to sustain bids, which means longer-term indicators are more reliable to determine bitcoin’s price direction.

BTC was trading around $36,200 at press time and is down 17% over the past week.

The slowdown in upside momentum on monthly and weekly charts has been a persistent theme since December. As the long-term uptrend weakens, sellers typically outweigh buyers despite occasional oversold signals.

Further, when drawdowns (percent decline from peak to trough) become severe, short-term traders tend to reduce their position sizes and tighten trade parameters around intraday support and resistance zones.

Bitcoin is roughly 40% below its all-time high of $69,000, which is a significant drawdown. The previous drawdown extreme was in July when BTC settled near $28,000 after falling roughly 50% from its peak.

For now, initial support is around $35,000-$37,000, which could stabilize the current sell-off. The relative strength index (RSI) on the daily chart is the most oversold since May 19, which preceded two months of sideways trading before a rebound occurred.

If selling pressure accelerates this week, BTC could find stronger support around $30,000.

Important events

8:30 a.m. SGT/HKT (12:30 a.m. UTC): Jibun Bank manufacturing purchasing managers index (PMI) (Jan. preliminary)

5 p.m. SGT/HKT (9 a.m. UTC): Euro Zone Markit Manufacturing PMI (Jan. preliminary)

10:45 p.m. SGT/HKT (2:45 p.m. UTC): U.S. Markit Manufacturing PMI (Jan. preliminary)

11:30 p.m. SGT/HKT (3:30 p.m. UTC): Dallas Fed manufacturing index (Jan.)

CoinDesk TV

In case you missed it, here is the most recent episode of « First Mover » on CoinDesk TV:

Bitcoin Drifting Below $40K, Fed Releases White Paper on Central Bank Digital Currency, SEC Chair Gary Gensler Wants More Control of Crypto

« First Mover » hosts were joined by Rep. Tom Emmer (R-Minn.) as he introduces a new bill aimed to limit the Federal Reserve’s ability to issue a digital currency. This comes as the Federal Reserve has just released a long-awaited white paper on the digital dollar. Bitcoin crashed to a five-month low. Managing Director of MarketGauge Group Michele Schneider provided her analysis. Plus, former SEC Commissioner and Patomak Global Partners CEO Paul Atkins gave his take on the latest regulatory signal from Securities and Exchange Commission Chair Gary Gensler.

Latest headlines

Bitcoin Heads for Worst Week in 8 Months as Traders Lament ‘Pikachu Pattern’: The price appeared to stabilize around $35,000, but gallows humor filled social-media sites as more than $1.5 billion of tradition positions were liquidated.

No, Tech Stocks Aren’t Driving Crypto Prices: The relationship between bitcoin and the Nasdaq is there, but it isn’t as strong as some suggest.

Here’s Why Bitcoin Tumbled 11% in 24 Hours: Bitcoin is currently trading around 45% below its all-time high of $68,700.

Crypto Market Cap Falls Below $2T Amid Sell-Off: As bitcoin and ether breach $40,000 and $3,000 support levels, some altcoins are trading 60%-80% down from cycle highs.

Ethereum Could Hold Lead as Dominant Smart-Contract Blockchain: Coinbase Analysts: The only real “ETH killer” might end up being Ethereum 2.0, according to analysts for the U.S. exchange Coinbase.

Crypto Trader Tantra to Liquidate After ‘GBTC Discount’ Widens to Record: The Grayscale Bitcoin Trust (GBTC) has been trading at a steep discount since last February, but a further widening proved too much for one trading firm.

Twitter Seeks Senior Crypto Role on Heels of NFT Verification Announcement: The job posting advertises “NFT tooling, membership tokens, DAOs and more!”

Longer reads

Simpin’ Ain’t Easy: The Business Sense Behind IreneDAO: Crypto seems poised to magnify existing financial relationships between influencers and their obsessive fans.

Today’s crypto explainer: What is SegWit

Other voices: Money in the Metaverse

Said and heard

« What we would hope is that, as we get into the next weeks to month or so, we’ll see throughout the entire country the level of infection get to below what I call that area of control. » … (Anthony Fauci on ABC’s This Week) … « Now some executives say supply challenges are worse than ever. The lack of workers leaves a broader range of products in short supply, food-industry executives said, with availability sometimes changing daily. » (U.S. Food Supply Is Under Pressure, From Plants to Store Shelves/The Wall Street Journal) … « Hunt offers an analogy here: Our future engagement with the metaverse could mimic how, with the help of science, we came to accept the real existence of an unseeable “microverse:” that realm of viruses, parasites and other microbes that we’ve since learned how to manipulate, sometimes in sinister ways. » (CoinDesk Chief Content Officer Michael Casey) … « Many altcoins are into support at their summertime 2021 lows, making it critical that bitcoin holds support as it sets the tone for the cryptocurrency space. » (Katie Stockton, managing director of Fairlead Strategies, quoted by CoinDesk)