First Mover Asia: Bitcoin Continues Its Sluggishness Amid Darkening Economic Signs

Investors are looking for indications the largest cryptocurrency by market capitalization has reached a bottom point and is ready to rebound; ether's price was roughly flat over the weekend.

Jan 16, 2022 at 11:37 p.m. UTC
Updated Jan 18, 2022 at 3:03 p.m. UTC

Damanick is a crypto market analyst at CoinDesk where he writes the daily Market Wrap and provides technical analysis. He is a Chartered Market Technician designation holder and member of the CMT Association. Damanick is also an equity/fixed income portfolio manager and does not invest in digital assets.

James Rubin is CoinDesk's U.S. news editor based on the West Coast.

Good morning. Here’s what’s happening:

Market moves: Bitcoin's price hovered above $43,000 as investors looked for signs the cryptocurrency's price had hit a bottom point.

Technician’s take: Support remains intact, which could keep BTC buyers active over the short term.

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

Prices

Bitcoin (BTC): $43,210 -0.1%

Ether (ETH): $3,359 +0.5%

Markets

S&P 500: $4,662 +.08%

DJIA: $35,911 -0.5%

Nasdaq: $14,893 +0.5%

Gold: $1,817 -0.2%

Market moves

The crypto price slump continues.

Bitcoin spent much of its weekend roughly where it started it, hovering just over $43,000. That level was a little better than at the start of the week, but well off its highs just two months ago. Trading was light as investors looked for signs that bitcoin's downward spiral has reached an end point and that the largest cryptocurrency by market capitalization is ready to enter a new bull cycle. Ether and most other altcoins followed a similar sluggish pattern.

The weekend saw bitcoin in a choppy zone with no clear trend," BitBull Capital CEO Joe DiPasquale told CoinDesk. "Volumes have also been lacking and bitcoin's failure to cross $45,000 is a sign of its inherent weakness. When bitcoin experiences a sharp drop, investors and traders are looking for aggressive buying to confirm a bottom and reversal; however, we haven't seen much of that since Bitcoin dropped below $40,000 briefly."

The crypto market's struggles come as the Omicron variant of the COVID-19 virus rages and many businesses struggle with supply chain issues and the increasing cost of raw materials. Last Wednesday the U.S. central bank also reported that inflation had hit 7%, a 40-year high.

DiPasquale does not see bitcoin's price dramatically rising in the days ahead, although he noted that the next options expiry on Jan. 28 could could serve as a "possible trigger" to send Bitcoin toward $50,000.

Technician's take

CoinDesk - Unknown

Bitcoin daily price chart shows support/resistance with RSI on bottom. (Damanick Dantes/CoinDesk, TradingView)

Bitcoin (BTC) buyers are attempting to reverse a two month-long downtrend. The cryptocurrency declined by roughly 30% from an all-time high near $69,000 in November, and now technical indicators suggest the sell-off is starting to stabilize.

BTC was up about 3% over the past week, although the recent decline in trading volume suggests large price swings could occur.

Support is seen around the $40,000 price level, which could limit pullbacks over the short term. Still, upside could be limited toward the $45,000-$47,000 resistance zone over the weekend.

The relative strength index (RSI) on the daily chart is rising from oversold levels, similar to what occurred in late September, which preceded a price rally. This time, however, upside momentum is starting to wane on weekly and monthly charts, which lowers the chance of significant buying.

Important events

10 a.m. HKT/SGT (2 a.m. UTC): China gross domestic product (Dec. QoQ/YoY)

10 a.m. HKT/SGT (2 a.m. UTC): China industrial production (Dec. YoY)

10 a.m. HKT/SGT (2 a.m. UTC): China retail sales (Dec. YoY)

12 p.m. HKT/SGT (4 a.m. UTC): Japan tertiary industry index (Nov. YoY)

U.S. Martin Luther King holiday

CoinDesk TV

In case you missed it, here are the most recent episodes of “First Mover” on CoinDesk TV:

Cash transfer company MoneyGram is doubling down on its partnership with Coinme, investing in the crypto-cash exchange for a 4% ownership stake. MoneyGram CEO Alexander Holmes and Coinme CEO Neil Bergquist joined "First Mover" to discuss their expansion plans and partnership, making it possible for consumers to purchase bitcoin at thousands of U.S. retail locations. Plus, what to make of the latest crypto market ups and downs. Brad Roth of Thor Financial shared his analysis and outlook.

Latest headlines

Walmart Preparing a Metaverse Push, Trademark Filings Show: The retail giant may also be planning to create its own cryptocurrency and non-fungible tokens (NFT).

Crypto Influencer Cooper Turley Removed From FWB Over 2013 Bigoted Tweets: Turley, once an adviser to the influential crypto social club Friends With Benefits, is taking a step back.

After Bitcoin’s Weak Start to the Year, Analysts Now Predict Price Increase: One analyst sees stubbornly high inflation numbers coupled with a continuation of negative real interest rates as key market catalysts.

Crypto Exchange Bitfinex Tells Ontario Customers to Close Accounts: Bitfinex customers in the Canadian province should withdraw all their funds on or before March 1, the exchange said.

Blockchain Data Startup Lukka Reaches $1.3B Valuation: The software and data company has raised $110 million in new funding to accelerate its global expansion strategy.

Crocs Is Chomping Into NFTs, Trademark Filings Show: The footwear brand staked its name claim on NFT shoes, bags and accessories in a Jan. 11 USPTO filing.

Longer reads

Off the Charts: DeFi Rebound: Total value locked is rising despite the retreat in other crypto prices.

Other voices: Explaining Ethereum: Interview with Vitalik Buterin (Part 1) (Harvard International Review)

Said and heard

"Both sides of this raging debate have reasonable points of view. There’s the Chris Dixon position that Web 3 projects are creating real value and the countervailing Jack Dorsey position that the term is just a buzzword exploited by venture capitalists to boost their equity and token investment." (CoinDesk Chief Content Officer Michael Casey writing about Web 3) ... "It’s too early to say whether the rebound in TVL will meaningfully reverse the declines in DeFi commitments seen since last spring. However, it’s notable the value has increased despite close to no rebound in dollar prices. We will have to see whether the sector can return to the unbridled enthusiasm of a year ago, or whether the zeitgeist has been lost to NFTs." (Michael Casey writing about DeFi pricing) ... "Will the Chinese be able to control it or not I think is a really important question. If they're going to have to begin closing down port cities, you're going to have additional supply chain disruptions." (U.S.-China Business Council President Craig Allen) ... "The next few weeks will be tough." (U.S. Surgeon General Vivek Murthy on the continued outbreak of the Omicron variant)

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The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

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Damanick is a crypto market analyst at CoinDesk where he writes the daily Market Wrap and provides technical analysis. He is a Chartered Market Technician designation holder and member of the CMT Association. Damanick is also an equity/fixed income portfolio manager and does not invest in digital assets.

CoinDesk - Unknown

James Rubin is CoinDesk's U.S. news editor based on the West Coast.

CoinDesk - Unknown

Damanick is a crypto market analyst at CoinDesk where he writes the daily Market Wrap and provides technical analysis. He is a Chartered Market Technician designation holder and member of the CMT Association. Damanick is also an equity/fixed income portfolio manager and does not invest in digital assets.

CoinDesk - Unknown

James Rubin is CoinDesk's U.S. news editor based on the West Coast.

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