“The crypto market was in a sea of red on Friday as bitcoin, the world’s largest cryptocurrency by market capitalization, tumbled more than 10% over the past 24 hours. Alternative cryptocurrencies (altcoins) led the way lower given their higher risk profile relative to bitcoin.
The total market cap of the cryptocurrency industry has fallen 11% to $1.9 trillion as of Friday afternoon U.S. time from an all-time high of $3.1 trillion in November. There has been nearly $600 million in liquidations during the last 12 hours. Bitcoin led the liquidation pack at $250 million, followed by ether at $163 million.
It appears that global investors have entered the year with a reduced appetite for risk, and so the correlations between speculative assets such as cryptocurrencies and equities have increased, which results in widespread losses. Bitcoin is down roughly 40% from its all-time high of almost $69,000, while the S&P 500 is down about 7% from its peak, compared with a 10% drawdown in the Nasdaq 100 Index.
We expect BTC to find a bid around the $35K mark, close to 50% from the top. In the short term, we can bounce to challenge the $45K-$50K zone, but the overall outlook remains bearish as liquidity remains tight.
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.
For now, technical indicators show nearby support at about $37,000 for bitcoin, although stronger support at $30,000 could stabilize a deeper correction.”
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“The world’s largest cryptocurrency by market capitalization began to drop Thursday around 19:00 UTC (2 p.m. ET), following the lead of the equity market, which saw a sharp decline into the U.S. 4 p.m. close. Here’s what analysts are saying is behind the fall in price:
1. BTC is moving in conjunction with traditional markets
Bitcoin and the broader cryptocurrency market as a whole is acting as a high-sentiment beta asset – meaning it is moving in tandem with the broader markets and is more impacted by the recent negative sentiment. Macroeconomic fears and poor technology company earnings have also exacerbated this correlation.
2. Leveraged long positions
Leveraged long positions exacerbated the sell-off into the Asian open on Friday. $40,000 was an important support which has now turned into a resistance level.
3. Negative market sentiment
Bitcoin’s (BTC) fall in price is a simple continuation of the same trend that has been occurring in the last few weeks – negative market sentiment. Once fear sets in, it takes a while to break and you simply have to wait for capitulation before you can move back to “normalized” ranges.”
“Mining difficulty on the Bitcoin network increased by 9.32% and hit an all-time high of 26.64 trillion on Jan. 21, beating the previous record set on May 13, 2021.
Most miners from China estimated they would come back online in Q1 2022, so ‘we can attribute a good bit of this increase [in difficulty] to Chinese miners finally coming online in North America.’ Given the soaring price of bitcoin last year, miners booked “super profits,” so they tried to get more mining capacity online as fast as possible. Analysts and industry insiders expect the trend to continue well into 2022.
From July 2022 to December 2022, most of the largest miners have enormous deliveries of the Antminer’s newest ASIC Antminer S19 XP. These deliveries will make the difficulty soar throughout the whole 2022.”
“The role – “Senior Product Manager, Crypto,” – has a special focus on “creator monetization.”
In this capacity, we’ll be looking closely at NFTs and NFT tooling, membership tokens, DAOs and more!
The announcement comes as Twitter ventures further into the realm of Web 3, perhaps to the chagrin of founder Jack Dorsey, an avowed bitcoin maximalist. Notably, the Twitter job post lists collaboration with Bluesky, the company’s decentralized social media initiative.
Yesterday, the company rolled out NFT verification services to those who pay $3 a month for its Twitter Blue service.”
“The only real “ETH killer” might end up being Ethereum 2.0, according to analysts at Coinbase Institutional, which provides cryptocurrency research to big investors.
Ethereum’s layer 2, or companion system, which works alongside the main blockchain to speed transactions at lower cost, may help to stave off competition from other layer 1, or base layer, protocols. Planned upgrades to Ethereum itself, such as a full transition to a proof-of-stake blockchain from the current proof-of-work system as well as the introduction of sharding may also help.
As the ecosystem’s scalability improves, users of decentralized applications, or dapps, may refrain from looking for faster and cheaper alternatives to Ethereum. The development is likely to narrow layer 1 alternatives’ opportunities in the second half of 2022, according to the Coinbase analysts.
We do think that the culmination of [layer 2] scaling solutions combined with upgrades like the Beacon Chain merge and sharding could limit progress for alternative [layer 1s] in their current form.”
“Britain has been lagging behind, particularly when it comes to crypto, according to some industry watchers. Meanwhile, the U.S. is seeing fintech firms with $100 billion valuations going public. ‘The global race has started and the U.K. is getting left behind.’
The U.K. has focused only on risk, and perhaps missed the big picture. We need to ensure that regulation keeps pace with the rapid advancements in technology.
We will lose a lot of innovators in the U.K. if this FCA rhetoric continues. Right now the word on the street is don’t set up in the U.K.”