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  • What to expect in crypto ahead of inflation report, as Bitcoin banks eight straight days of gains

    What to expect in crypto ahead of inflation report, as Bitcoin banks eight straight days of gains

    Key Takeaways

    • Bitcoin has increased for eight straight days, now up 9.2% on the year
    • Period of low volatility in the crypto markets paired with softer inflation data has sent prices upward
    • Latest CPI report is out Thursday which will trigger volatility and is vitally important for the market following increased optimism over last month or so
    • Altcoins could move violently on the report, while Bitcoin will likely shake off its $18,000 mark if data comes in below or above expectation

     

    Bitcoin has banked eight straight days of price rises, as the new year has kicked off assiduously for cryptocurrency investors.

    Whereas 2022 brought nothing but pain and freefalling prices, 2023 has thus far been the exact opposite. Bitcoin is up above $18,000 and Ethereum close to $1,400, good for rises of 9.2% and 16.4% respectively year-to-date. Many altcoins are up even more.

    Volatility has reduced in the crypto markets

    The macro climate is pushing prices upward. I wrote a piece analysing the softer climate last week, but optimism has crept into the market that inflation may have peaked and that the possibility of a pivot from the Federal Reserve off its policy of heightened interest rates may be coming soon than previously anticipated.  

    It should be noted that while this is a nice rally, it is hardly a violent breakout. Cryptocurrencies are notoriously volatile and there has actually been an unusual serenity that has washed over markets over the past couple of weeks.

    A quick glance at the chart for the daily returns of Ethereum illustrates that there has been a perceptible fall in volatility.

    Inflation data to be released Thursday

    I write this on Thursday morning, with the all-important US inflation data to be released this afternoon. If we know anything by now, it is that inflation numbers rule the world. If there is anything in the current climate that will produce volatility, it is the CPI report.

    As mentioned above, this relief rally has largely been predicated on softer inflation leading to the hope that the Federal Reserve will pivot off its high-interest-rate policy sooner than anticipated. Another positive inflation number would give further impetus to crypto prices. It is not hard to imagine Bitcoin pushing up towards $20,000 and Ethereum to $1,500 if the number comes in cooler than anticipated.

    On the flip side, of course, is the potential for the number to disappoint investors. Following two straight months of positive inflation, a step back this afternoon would be a body blow for crypto, and it would not be a surprise to see it drop sharply as all the optimism of the last month gets released in an instant.

    The inflation number is expected at 6.5%. This would be a decline from the prior month of 7.1%. Should the number come in at 6.7% or higher, this would represent a major disappointment and crypto will likely freefall. Do not be surprised to see Bitcoin down at $16,500 in this scenario.

    The data will be released at 1:30 PM GMT (8:30 AM ET), and it is the last CPI report before the Federal Reserve’s February 1st interest rate decision.

    Altcoins showing signs of life

    However bad things have been for Bitcoin and Ethereum, the landscape has been a hell of a lot worse for altcoins. Below are the percentage returns in 2022 from the top 10 coins as of 1st January 2022.

    As is standard, these coins are significantly more volatile, and trade like leveraged bets on Bitcoin. It follows that this year, the jumps have also been stronger than the number 1 crypto. 

    Looking at the top 10 coins from Jan 1st this year, some of the returns have been seismic, albeit from a significantly lower base. Remember, a 90% drop followed by a 50% rise is still the same as an 85% drop from the original starting point. A simple math problem that many investors do not understand. Hence, the past couple of weeks have been positive, but this is still a space that has been absolutely ravaged by the bloodbath that was 2022, and it will take a very long time to recover from. 

    Final thoughts

    This is a pivotal week for the markets and it will be a true gauge of how far the battle against inflation has come. Central banks have been adamant that inflation is the number one priority, and the consequent interest rate policy has crushed risk assets over the last year.

    Things are tough in the markets, but with a third straight month of OK inflation data, it could point toward a light at the end of the tunnel. Then again, the world is teetering on the edge of a recession as it is, and if inflation takes a step back, it will be a double whammy of high rates and still-persistent inflation. As always, risk assets will feel the pain. 

    Crypto investors will just have to hope that the pivotal CPI number doesn’t dare tick up beyond 6.5%. 

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  • Its the calm before the storm in crypto markets

    Its the calm before the storm in crypto markets

    Key Takeaways

    • Crypto volatility has come down and extreme on-chain activity subsided in period of relative calm
    • Several concerning developments around Genesis, Gemini and DCG are still ongoing, however
    • Volatility could also spark up once the US inflation data is revealed this week
    • Period is reminiscent of the low drama environment pre-FTX in October 

     

    After a tumultuous rollercoaster following the shocking demise of FTX, a period of notable serenity has descended upon cryptocurrency markets. 

    With 2022 being a complete and utter bloodbath, it almost feels suspicious that there is even a couple of weeks of low drama in the digital market space. 

    But the metrics show that the last few weeks have been among the quietest of the last couple of years. Given the fear of contagion that transpired out of FTX’s collapse, that is a good thing. 

    Fear still elevated in crypto circles

    Having said that, there is plenty to be concerned about right now. As Coinbase CEO Brian Armstrong stated yesterday when he announced Coinbase was cutting an additional 20% of its workforce, there are likely “more shoes to drop” and there is “still a lot of market fear” out there. 

    Crypto lender Genesis last week laid off 30% of its workforce and is reportedly mulling bankruptcy. Crypto exchange Gemini, founded by the Winklevoss twins, has $900 million of customer assets stuck in limbo with Genesis, its sole lending partner for its Earn product. 

    The twins have demanded Barry Silbert, CEOP of Digital Currency Group (DCG), which owns Genesis, to step down, accusing him of defrauding Gemini Earn customers. 

    DCG fired back, calling it “another desperate and unconstructive publicity stunt from Cameron Winklevoss to deflect blame”. It also affirmed it was “preserving all legal remedies in response to these malicious, false, and defamatory attacks).  

    DCG is also the parent company of the Grayscale Bitcoin Trust, which has seen a massive discount to its net asset value, peaking at 50% in the aftermath of the FTX collapse as investors questioned whether reserves were safe (I wrote about GBTC yesterday).  

    Markets stand firm for now

    For now, while all these episodes play out, the markets are standing firm. Action has been relatively muted, and in fact there has been a tangible return to normal levels for a lot of on-chain activity that went wacky over recent periods. 

    The below snapshot shows the net transfer volume in and out of exchanges. Since the start of the year, the action has been tepid, having spiked to extreme levels in November and December as first FTX collapsed and then the questions spiked about the health of Binance. 

    This notion that activity has returned to normal is reinforced when looking a the volatility of Bitcoin. The world’s biggest cryptocurrency has been trading sideways for a while now, and the 30-Day Pearson measure of volatility shows how there was a perceptible drop back down to pre-FTX levels in December. 

    Macro climate looking more optimistic

    It hasn’t just been a respite from within crypto circles. The broader macro environment is looking at least a bit brighter today than it did last month. Inflation is still rampant, but there have been two consecutive readings below expectation, and there is renewed hope that it may have peaked.

    The most recent round of interest rate hikes kicked rates up 50 bps as opposed to 75 bps in the two prior months, and while Fed chair Jerome Powell and other central bank chiefs have affirmed that rates will continue to rise until inflation is conquered, the market has moved cautiously upward after European inflation came in at 9.2%, compared to 10.1% last month.

    Next up is the US CPI reading on Thursday, which will – as always – be a vitally important day in markets. Expect volatility in crypto markets as coins stare at the number to try to assess what Jerome Powell may do with regard to interest rate policy.

    After all, we know by now that crypto is very much holding the stock market’s hand – apart from when, you know, high-profile executives are revealed to be fraudulent (FTX), or top 10 coins cease to exist (LUNA).

    Never a dull moment for long in crypto

    Back in late October, Bitcoin was seemingly locked in crab motion around $20,000. With traders getting impatient, I warned how crypto could be one event away from a nasty downward wick. T

    Three weeks later, FTX collapsed. I never imagined this would happen, and the timing was coincidental, but the premise of the piece reminds me of how I feel now. It’s amazing how short memories are in markets, but we have been here before.

    Crypto won’t stay silent for long, and the asset class is far from out of the woods yet. The aforementioned ongoings around DCG, GBTC, Genesis and Gemini are just a few of the million things that could turn south at any moment.

    There is also the story around Binance chief Changpeng Zhao being under investigation for money laundering offences by the SEC, there is Coinbase laying off 20% of its workforce following a 905 drawdown in its share price, and God knows what will come out of testimonies in the Sam Bankman-Fried court proceedings.

    And then there is macro, where anything could happen to inflation, the Russian war in Ukraine or myriad other variables. It’s been a quiet couple of weeks but don’t worry – the madness will return soon.

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  • BONK price action spells trouble after becoming an overnight crypto sensation.

    BONK price action spells trouble after becoming an overnight crypto sensation.

    • Bonk token launched on December 25, 2022

    • The cryptocurrency rose by four-digit percentages after the launch

    • BONK price has cooled and trades on a descent and could claim lower levels

    Crypto has always treated its fans with twists, turns, and surprises. The crypto community loves it this way, for it becomes a time to make quick bucks as the rest of the market sleeps. In 2022, we were treated to a wild launch of the ApeCoin. Before the dust settled, Optimism airdrop came with a thud! The year couldn’t end in a better way for crypto fans than it did with the Bonk token (BONK/USD).

    If you are a fan of meme tokens, then BONK does not miss your watchlist after a heroic entry into the crypto space. Launched on December 25, 2022, BONK has been a sensation, jumping by four digits percentage in price. The token also dominated social trading platforms. Analysts credited the popularity of the newly dog-themed token to the Solana community. The former is based on the Solana network.

    Nonetheless, if history is indeed a good teacher, then we should learn that the gains may not last forever. We have seen highly hyped launches boosting token prices, only for them to crash thereafter. BONK may not be an exception. As of press time, the meme cryptocurrency had lost at least 50% of its value from its all-time high. Typical of the phrase, if you didn’t board early, don’t do it now. Technical pointers show BONK could fall further.

    BONK on a decline as price finds minor support

    BONK/USDT Chart by TradingView

    From the 4-hour chart outlook, BONK trades nervously at a support zone. The highs to the upside have been lower, coinciding with a declining price. Buy-side volumes have improved slightly at the support, but not sufficient to boost BONK’s price.

    BONK price prediction

    As the hype around the BONK launch dies, the price could continue falling. Investors may look at BONK as an overvalued asset. Profit-taking and panic selling may also be at play and force a bearish breakout. 

    Where to buy BONK

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  • Why are crypto prices rising? 2023 off to hot start

    Why are crypto prices rising? 2023 off to hot start

    Key Takeaways

    • Crypto markets have jumped to the start the year off positive macro news
    • Next inflation reading is out on Thursday, which will cause further volatility
    • Fight against inflation has long way to go, with investors not out of woods yet
    • Solana has risen 65% since New Year’s Day, but fell drastically prior and problems remain

    After what was, to put it mildly, a rather disappointing year in cryptocurrency in 2022, the new year has jumped out to a positive start.

    Bitcoin, Ethereum and all their other friends got ravaged last year, but nine days into 2023 there is green on the board. Let’s look at why this is, and whether we will see more of the same, or if price action will reverse back to the 2022 pain.

    Macro provides impetus for crypto run

    The single biggest reason for the cryptocurrency jump this year is the same reason that pulled the entire space down last year: macro.

    The stock market has had a positive start to the new year. This comes off the back of inflation readings around the globe coming in lower than expected. While there is still a hell of a long way to go in the battle against this rampant cost of living crisis, the latest data has given investors hope that central banks may pivot off their policy of high interest rates sooner than previously anticipated.

    After a decade of low interest rates, the world transitioned to a new interest rate paradigm in 2022, as rates were hiked aggressively in response to the inflation crisis. This was aimed at reining in demand and ultimately spiralling prices. As a result, all risk assets peeled back, and there is nothing riskier than crypto. So, down the market went.

    Solana decouples from market

    Of course, while macro is clearly the big driver here, there still remains idiosyncratic risk and happenings in the crypto space. Look no further than last year, when three events (Luna, Celsius and FTX) caused large dropdowns and deviations from the stock market, which otherwise displayed extremely high correlation with Bitcoin.

    To start the year, we have seen Solana streak out ahead of the crowd, printing a remarkable 65% return thus far, having opened the year at $10 and now trading at $16.50.

    I wrote a piece last week diving deep on Solana, but suffice it to say the coin has big problems. Between repeated outages, has seen several big projects flee the blockchain and has also suffered as a result of its close ties with the disgraced Sam Bankman-Fired. The below chart shows that while this rebound seems large at 65%, it is still a drop in the ocean compared to the freefall it has experienced.  

    This rise over the last week may be at least partially attributed to Bonk, the latest meme coin phenomenon which I also analysed last week. We know by now not to read too much into doggy tokens, but nonetheless, the rise has at least eased some of the pain for Solana investors.

    What Bitcoin continue to rise?

    As for the future, that is anyone’s guess. The next big day is Thursday, when the latest CPI figures are revealed. If inflation in the US comes in softer than expected, you can expect markets to rally upwards on renewed hope.

    It really comes down to the same thing it has for the last year: the crypto markets will only meaningfully rebound once the Federal Reserve pivots away from its currently-hawkish interest rate policy.

    In turn, the Fed maintains that rates will continue to rise as long as inflation is elevated. With the employment market still tight and core inflation remaining stubborn (the headline rate has partially fallen due to energy prices, whereas core inflation is typically the number that lawmakers focus on), there is still a long way to go.

    Ultimately, 2023 in the crypto markets will likely be decided based on what happens with this tussle between the Fed and inflation. Until that much-fantasised-about pivot actually occurs though, it could remain a tough time for digital markets.

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  • 73% less Bitcoin millionaires than a year ago, as crypto losses top $2 trillion in torrid 2022

    73% less Bitcoin millionaires than a year ago, as crypto losses top $2 trillion in torrid 2022

    Key Takeaways

    • Cryptocurrency industry was valued close to $3 trillion entering 2022, now it is $800 billion 
    • There are 73% less Bitcoin millionaires after 2022
    • Bitcoin has pulled back 75% from its all-time high fo close to $69,000
    • 25% of the bitcoin supply was in a loss entering the year, now it is over 50%
    • Number of investors holding greater than 1 BTC jumped 20% as the hurdle became much more attainable

        

    Once upon a time, the cryptocurrency market was valued at $3 trillion. To be precise, this was in November 2021, when Bitcoin traded at its all-time high of close to $69,000.

    But then along came 2022. Inflation sparked as a result of the COVID money printing, war in Ukraine and supply chain issues, meaning central banks worldwide were forced to hike rates to curtail a spiralling cost-of-living crisis.

    With the cheap liquidity pulled out from under markets, Bitcoin – and crypto as a whole – felt the pinch. We have seen top 10 cryptocurrencies collapse, one of the top exchanges revealed to be a house of cards and numerous other bankruptcies and scandals. 

    The loss has been greater than $2 trillion, with Bitcoin shedding three-quarters of its value as at the time of writing, trading at $16,800.

    Bitcoin millionaires

    Looking at on-chain data from bitinfocharts.com, Bitcoin millionaires have dropped like flies. Entering 2022, there were 90,000 addresses containing over a million dollars worth of Bitcoin. Today, it is 24,000 – that amounts to a fall of 73%.

    “The on-chain data sums up what is glaringly obvious from looking at a Bitcoin price chart – that the party is over and investors are no longer dreaming of retirement off their Bitcoin holdings, in the near future at least! Nearly three-quarters of Bitcoin millionaires losing that status is perhaps the best piece of data of all to summarise how ugly 2022 was for investors” said Max Coupland, Director at CoinJournal. 

    Percent in supply in loss doubles in 2022

    Bitcoin’s returns before 2022 were astonishing. As a result, the bulk of the supply was in profit, with only 25% of the supply loss-making entering the year. By year-end, this had doubled to over 50% – another stunning statistic when considering that Bitcoin was the best-performing asset class in the world over the prior decade. 

    Addresses holding greater than 1 BTC

    On the flipside, with Bitcoin being so cheap compared to last year, the number of addresses containing one Bitcoin or greater – “whole coiners”, as they are known – is at all-time high, even if the dollar value contained in those addresses is way down. 

    Entering 2022, there were over 814,000 addresses holding more than 1 BTC. By the end of the year, this number was over 978,000 – that is a rise of 20%.

    As can be seen when zooming in on 2022 on the below chart, there were significant jumps when Bitcoin plunged off the back of the three major scandals of 2022 – Luna’s death spiral, Celsius’ insolvency and the revelations of fraud at FTX. 

    Dropping sentiment matching falling prices

    Perhaps the biggest problem emerging from 2022 is related to these scandals. The reputation of crypto has taken a hammer blow, most notably with the shocking downfall of FTX and disgraced former CEO Sam Bankman-Fried. 

    According to a CNBC survey as of November 2022, only 8% of Americans now have a positive view of cryptocurrency. 

    Crypto investors have seen similar percentage declines before, of course, only for the market to bounce back. But this time, crypto is fighting against a pullback in the wider economy for the first time in its history. 

    Until now, it had been zero (or negative) interest rates and a warm money printer. Now, we have transitioned to a new environment, and crypto investors are feeling the pain. They will hope that 2023 can bring a return to prominence and start mending the reputation of the wounded asset class. 

    If you use our data, then we would appreciate a link back to https://coinjournal.net. Crediting our work with a link helps us to keep providing you with data analysis research. 

    Research Methodology

    Address data taken from on-chain. Price data from Yahoo Finance. 

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  • DOGECOIN is now listed on the top European crypto exchange Bitstamp

    DOGECOIN is now listed on the top European crypto exchange Bitstamp

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  • SHIB becomes one of the most watched Crypto assets in Binance

    SHIB becomes one of the most watched Crypto assets in Binance

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  • Crypto price predictions: Bitcoin, Cardano, Binance Coin

    Crypto price predictions: Bitcoin, Cardano, Binance Coin

    Crypto prices remained in a consolidation phase this week as concerns about FTX contagion continued. They also reacted to the latest interest rate decision by the Federal Reserve and the arrest of Sam Bankman-Fried. Here are some of the top crypto price predictions for the weekend.

    Bitcoin price prediction

    Bitcoin pulled back sharply after the latest interest rate decision by the Federal Reserve. This decline correlated with the performance of American indices like the Dow Jones and the Nasdaq 100 indices. 

    Bitcoin price dropped to a low of $16,923, which was the lowest level since December 12. It also declined below the important level at $17,395, which was the neckline of the inverted head and shoulders pattern.

    It has also pulled back below the 25-day and 50-day moving averages while the Relative Strength Index (RSI) has moved below the neutral level of 50. Therefore, Bitcoin price will likely continue falling as contagion fears continue. 

    If this happens, the next key level to watch will be at $16,000. In the near term, however, a bullish breakout to $18,000 cannot be ruled out as the shakeup eases.

    BTC/USD chart by TradingView

    How to buy Bitcoin

    eToro

    eToro offers a wide range of cryptos, such as Bitcoin, XRP and others, alongside crypto/fiat and crypto/crypto pairs. eToro users can connect with, learn from, and copy or get copied by other users.


    Buy BTC with eToro today

    Bitstamp

    Bitstamp is a leading cryptocurrency exchange which offers trading in fiat currencies or popular cryptocurrencies.

    Bitstamp is a fully regulated company which offers users an intuitive interface, a high degree of security for your digital assets, excellent customer support and multiple withdrawal methods.


    Buy BTC with Bitstamp today

    Binance Coin price prediction

    Binance Coin price has been in a strong bearish trend in the past few days. It collapsed to the lowest level since November this year. This decline accelerated this week as Bitcoin FUD trended in Twitter and other social media platforms like Reddit. FUD stands for Fear, Uncertainty, and Doubt.

    Concerns about Binance continued after the arrest of Sam Bankman-Fried, which we wrote about in this article. Investors are worried about the significant information that we still don’t know about Binance. For one, it is unclear how much money Binance makes and how much debt it has.

    Therefore, like Bitcoin, the BNB price will likely continue falling as sellers target the psychological level of $200.

    BNB/USD chart by TradingView

    How to buy BNB

    eToro

    eToro offers a wide range of cryptos, such as Bitcoin, XRP and others, alongside crypto/fiat and crypto/crypto pairs. eToro users can connect with, learn from, and copy or get copied by other users.


    Buy BNB with eToro today

    Binance

    Binance is one of the largest cryptocurrency exchanges in the world. It is better suited to more experienced investors and it offers a large number of cryptocurrencies to choose from, at over 600.

    Binance is also known for having low trading fees and a multiple of trading options that its users can benefit from, such as; peer-to-peer trading, margin trading and spot trading.


    Buy BNB with Binance today

    Cardano price prediction

    Cardano price plunged on Friday as concerns about the hawkish Fed continued. It has also fallen because of the underperformance of its DeFi and NFT ecosystem. NFT volume crashed to just $8 million in November, its lowest level in months. 

    On the daily chart, Cardano remains below all moving averages. It also crashed below the important support level at $0.300, the lowest level on December 13. The Relative Strength Index has moved to the oversold level. Cardano price will likely continue falling as sellers target the next key support at $0.2500. 

    ADA/USD chart by TradingView

    How to buy Cardano

    eToro

    eToro offers a wide range of cryptos, such as Bitcoin, XRP and others, alongside crypto/fiat and crypto/crypto pairs. eToro users can connect with, learn from, and copy or get copied by other users.


    Buy ADA with eToro today

    Bitstamp

    Bitstamp is a leading cryptocurrency exchange which offers trading in fiat currencies or popular cryptocurrencies.

    Bitstamp is a fully regulated company which offers users an intuitive interface, a high degree of security for your digital assets, excellent customer support and multiple withdrawal methods.


    Buy ADA with Bitstamp today

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  • JP Morgan reports shows 13% of Americans are into crypto

    JP Morgan reports shows 13% of Americans are into crypto

    • JP Morgan has released a new report showing that more than 13% of the American population have transferred funds into crypto accounts.
    • The research sampled 5 million customers with checking accounts, 600,000 of whom had transferred money into a crypto account.
    • Most new investors first fund a crypto account during spikes for Bitcoin price, according to the report.

    Nearly 44 million Americans have ever transferred money into a crypto-related account, according to details shared in a new report by JP Morgan.

    In a report titled ‘The Dynamics and Demographics of US Household Crypto-Asset Use’, released on 13 December, the financial giant estimates that about 13% of the population has sent money to a crypto account. Per the bank’s data, involvement in crypto by the general population spiked during the COVID-19 pandemic, with more money finding its way into cryptocurrency investments as individuals’ personal savings also increased.

    The report covered close to 5 million active checking account users, more than 600,000 of whom were shown to have transferred funds to crypto accounts.

    Transfers to crypto accounts tripled between 2020 and 2022

    Cryptocurrency adoption across the United States has been steady, with other statistics suggesting similar adoption rates to what’s contained in this latest report.

    While JP Morgan says that only a tiny fraction of the US population was in crypto five years ago, its researchers found that the last three years have witnessed a huge jump in adoption. From the sample indicated, the banking giant estimated that crypto users in the US increased from a pre-pandemic population share of less than 3% to almost 15% by mid-2022.

    Of those to fund crypto accounts from their checking accounts, the research data shows a 300% spike. Cumulatively, only 3% of the population had transferred funds into a digital asset-related account prior to the pandemic. 

    That figure more than tripled in the last three years, with the trend seeing more than 43 million Americans, or 13% of the population funding crypto accounts.

    New investors increase when Bitcoin price spikes

    Another observation from the research is that funding of crypto accounts is that the transfers have largely come at a time when the price of Bitcoin is going up. Large volumes occur during bull markets or sharp rallies, with the trend going back to 2015, JP Morgan said.

    For most new users, the deposits span a few days and have coincided with the price of bitcoin seeing a trailing monthly change of +25%. It is this time that many people look to trade Bitcoin and other cryptocurrencies.

    Also observable is that most investors only make small transfers to their crypto accounts – less than a month’s pay. Indeed, the median transfer for the majority of investors is $620. Nonetheless, about 15% of individuals transfer more than a month’s worth of income. The share is even higher among high-income individuals.

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  • Dogecoin is one of the biggest market leaders in the Crypto World

    Dogecoin is one of the biggest market leaders in the Crypto World

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