First Mover Asia: Bitcoin, Altcoins Rise and Then Sink

The largest cryptocurrency by market capitalization plummets below $41,000 after rising earlier in the day.

AccessTimeIconJan 20, 2022 at 11:33 p.m. UTC
Updated May 11, 2023 at 4:42 p.m. UTC
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Good morning. Here’s what’s happening:

Market moves: The largest cryptocurrency by market capitalization falls under $41,000; ether and other major altcoins also drop.

Technician's take: Oversold conditions are attracting short-term bitcoin buyers.

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

Prices

Bitcoin (BTC): $40,882 -2.2%

Ether (ETH): $3,024 -2.8%

Top gainers

Asset Ticker Returns Sector
Cosmos ATOM +4.7% Smart Contract Platform
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Top losers

Asset Ticker Returns Sector
Ethereum Classic ETC −6.5% Smart Contract Platform
Filecoin FIL −4.8% Computing
Stellar XLM −3.7% 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.

Markets

S&P 500: $4,482 -1.1%

DJIA: $34,715 -0.8%

Nasdaq: $14,154 -1.3%

Gold: $1,839 +.05%

Market moves

After jumping over $43,000 for a short time, bitcoin plummeted below where it started 24 hours ago. Ether and the largest altcoins by market capitalization also rose promisingly before falling back.

At the time of publication, bitcoin was trading under $41,000, ether had dropped below $3,100, and 19 of the 20 largest major altcoins by market cap were in the red.

The moves downward reflected ongoing pessimism about the economy and rising interest rates, and mirrored bearish sentiment about once, high-flying tech stocks. After a late sell-off of stocks, the tech-heavy Nasdaq Composite index dropped 1.1% in U.S. trading hours. The S&P 500 fell similarly.

Joe DiPasquale, the CEO of the crypto fund BitBull Capital, said investors were initially upbeat about a study by the U.S. Federal Reserve on a digital dollar. "Any news that comes from such an official sources lends crypto credibility, and that credibility leads to increased demand," DiPasquale said.

He attributed crypto markets' recent down trend "to lower demand and some seasonability. "January is historically a soft month," he said. "So I'm hopeful as we lead into the next few weeks that there will be increased activity and demand."

Technician's take

Bitcoin four-hour price chart shows support/resistance (Damanick Dantes/CoinDesk, TradingView)
Bitcoin four-hour price chart shows support/resistance (Damanick Dantes/CoinDesk, TradingView)

Bitcoin (BTC) buyers are attempting to reverse a short-term downtrend on the charts.

Over the past two weeks, price action has been anchored around the $40,000 support level, which is where buyers previously stepped in ahead of the October price rally.

Still, the cryptocurrency could face resistance around $45,000-$48,000 as intraday signals approach overbought territory.

The 100-day moving average on the four-hour chart is sloping downwards, indicating a declining price trend over the past month. A decisive break above $43,000 could signal a positive trend shift on intraday charts.

On the daily chart, bitcoin appears to be oversold, albeit within a downtrend that began in November. That means upside could be limited given the decline in long-term momentum.

Important events

Australia Housing Industry Association new home sales (Dec.)

3 p.m. HKT/SGT (7 a.m. UTC): UK retail sales (Dec. MoM/YoY)

8:30 p.m. HKT/SGT (12:30 p.m. UTC): Speech by European Central Bank President Christine Lagarde

11 p.m. HKT/SGT (3 p.m. UTC): European Commission consumer confidence – preliminary (Jan.)

CoinDesk TV

In case you missed it, here is the most recent episode of "The Hash" on CoinDesk TV:

Will EU Ban Proof-of-Work Crypto Mining? Is Ether or Solana Winning the Hearts and Minds of NFT Investors?

"The Hash" hosts discussed hot topics, including the possible ban of proof-of-work crypto mining in Europe, Argo's new venture into non-mining business, JPMorgan's report on NFT market share and more.

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Said and heard

"We've seen crypto winters pop up before and it's possible that we can see that but what strikes me is a year ago $37-something-thousand is still a lot more than bitcoin's peak price in 2017 when that crypto winter began. (CoinDesk editor Nik De on Cheddar News) .... "In fact, none of the 682,569 items listed when searching Squid Game on OpenSea have any relationship with the intellectual property (IP) holder as it has not licensed anyone to use the trademark for a digital blockchain asset. Yet, all of these derivatives and, frankly, some direct stolen imagery are available for purchase or trade on the world’s largest NFT platform." (CoinDesk SVP, head of CoinDesk Studios)

Disclosure

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CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

James Rubin

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

Damanick Dantes

Damanick was a crypto market analyst at CoinDesk where he wrote the daily Market Wrap and provided technical analysis. He is a Chartered Market Technician designation holder and member of the CMT Association. Damanick is also a portfolio strategist and does not invest in digital assets.


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