State of The Crypto Market

Macro Overview

• US Federal Funds Rate Remains Unchanged at 5.25-5.5%: The Federal Reserve (FED) has opted to maintain the current Federal Funds Rate at 5.25-5.5%, signaling stability in monetary policy. This decision is viewed positively within the crypto space and the broader market, as it fosters an environment of consistency and accommodative financial conditions.
• Weekly US Unemployment Claims Show a Decline: The weekly report on US unemployment claims reveals a decline, with figures coming in at 202k compared to the anticipated 219k. While the drop indicates strength in the job market, it introduces a slight negative influence on the crypto market due to its historical inverse relationship with cryptocurrencies.
• US FOMC Statement by Fed Chair Powell: Fed Chair Jerome Powell’s statement conveys a dovish stance, expressing that further interest rate hikes are unlikely. Additionally, the Federal Reserve anticipates headline inflation to decelerate, targeting 2.8% in 2023 and easing further to 2.4% in 2024. This dovish sentiment is considered positive for the crypto space, fostering an environment conducive to risk assets.
• US CPI (Yearly) Reports Inflation Decline to 3.1% : The US Consumer Price Index (CPI) reflects a yearly inflation rate of 3.1% for November, in line with market expectations and a marginal decrease from October’s 3.2%. The stable inflation figures contribute to a measured economic landscape, influencing positively the sentiment within the crypto market.

Crypto Markets Overview

• Market Movement: This week, the crypto markets experienced a 0.51% downtick, bringing the total market capitalization to $1.578 trillion. Notably, BTC saw a fall of 2.25% and ETH saw a decline of 3.03%. Bitcoin’s dominance stands at 53.09%, while Ethereum’s holds at 17.34%.

• Ledger Faces Security Breach as Malicious Version of Ledger Connect Kit Surfaces: Security concerns loomed over Ledger, a prominent crypto hardware and software wallet provider, as the company disclosed the discovery of a “malicious version” of its Ledger Connect Kit. This kit serves as a library facilitating decentralized app (dApp) connections to the Ledger wallet service. Ledger took swift action, pushing out a genuine version to replace the compromised file and urged users to avoid interacting with any dApps temporarily. The incident triggered an immediate drop of over 3% in BTC and ETH prices, though both cryptocurrencies quickly rebounded.
• SEC Delays Decision on Invesco and Galaxy Digital’s Spot Ethereum ETF to February 2024: The U.S. Securities and Exchange Commission (SEC) announced a delay in its decision regarding the proposed spot Ether exchange-traded fund (ETF) by Invesco and Galaxy Digital. The extended deadline, now set for February 2024, adds to the ongoing anticipation around regulatory approval for an Ethereum ETF, influencing market sentiment within the crypto space.
• JPMorgan Report Suggests Ether Could Outperform Bitcoin in 2024: JPMorgan released a report indicating that Ether might outperform Bitcoin in 2024, attributing this potential shift to the upcoming Ethereum blockchain upgrade known as EIP-4844 or proto-danksharding. The upgrade aims to increase throughput and reduce transaction gas fees. The report adds a nuanced perspective to the ongoing debate over the performance trajectories of major cryptocurrencies.
• El Salvador Plans to Issue Bitcoin Bonds for “Bitcoin City” Construction: El Salvador revealed plans to issue bitcoin bonds in Q1 2024, with proceeds earmarked for constructing a “Bitcoin City” powered by a volcano. The regulatory approval from the Digital Assets Commission (CNAD) for the “Volcano Bond” underscores El Salvador’s commitment to innovative financial instruments and blockchain-based initiatives.

Top Tokens Update

• Solana Surpasses Ethereum in Weekly NFT Sales, Experiences Significant Rise: Solana emerged as a strong contender in the NFT space, surpassing Ethereum in weekly sales volume. Solana’s NFT sales marked a remarkable 53% increase over the previous week, reaching nearly $68 million. This gain overshadowed Ethereum’s sales volume, which experienced a 5% drop, emphasizing Solana’s growing influence in the NFT market. The development contributed to Solana’s price surge, boasting a gain of over 30% in the last two weeks.
• Worldcoin Unveils World ID 2.0 with Enhanced Platform Integration: Worldcoin, founded by Sam Altman of OpenAI, introduced World ID 2.0, an upgraded version of its identity feature. This release integrates seamlessly with popular platforms like Shopify, Mercado Libre, Reddit, and Telegram. Following the announcement, the WLD token experienced an initial spike of over 5%, signaling positive market response to the enhanced functionality. However, the token retraced its gains shortly after.
• Solana Memecoin BONK Surges, Overtaking Shiba Inu in Trading Volumes: Solana-based memecoin BONK experienced a substantial rally, becoming the third-largest memecoin by trading volumes. Following listings on Coinbase and Binance, BONK recorded a surge of over 150% in the week, showcasing the impact of exchange integrations on meme cryptocurrencies within the broader crypto market.

“Big Picture: Upcoming Weeks’ Key Economic Events”

Note: “Events in red font signify severe impact, while those in yellow indicate moderate.”

Bitcoin Technical Analysis

Summary:

• The current sentiment around BTC is neutral.
• This week, BTC experienced a retracement to $40k levels but swiftly bounced back, currently holding above $42,700. On a macro level, it appears bullish, with potential for a continued rally.
• This bullish outlook is supported by patterns in lower timeframes and overall positive price action.
• For those looking to acquire BTC, key support levels to consider are around $41,400 (20EMAD), $40,600, and $37,800. On the upside, resistance levels include $43,250 (local level) and $44,500-$45,000
• It is advisable to evaluate potential entry points around the mentioned support levels for long entries and at resistance levels for short entries.
• Additionally, setting limits to manage potential losses is prudent. For profit-taking, strategically selling near the outlined resistance levels/support levels is a recommended approach. Always exercise caution and implement sound risk management practices in trading endeavors.

Ethereum Technical Analysis

Summary:

• The current sentiment around ETH appears neutral.                                                                                                                                                          
• This week, ETH retraced near its crucial support and resistance flip at $2130-50, and after touching that, it bounced back, currently holding above $2260. ETH is positioned above the 20EMA D, indicating a positive sign in its price movement.
• Significant support levels include $2210 (20EMA D), $2130, and $2019, while resistance levels to watch are at $2380 and two key levels – $2450 and $2650. These levels play a crucial role in determining potential price movements.
•  It is advisable to evaluate potential entry points around the mentioned support levels for long entries and at resistance levels for short entries.
• Additionally, setting limits to manage potential losses is prudent. For profit-taking, strategically selling near the outlined resistance levels/support levels is a recommended approach. Always exercise caution and implement sound risk management practices in trading endeavors.

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