Bitcoin's volatility has hit a historic low, a phase that has historically been a precursor to a rebound. The price is currently facing resistance at the MA30 while finding support near the MA5 and MA13. This tug-of-war between bulls and bears suggests the market is likely to remain in a tight consolidation range for now.
I. Market Overview — Bitcoin: Bulls and Bears in a Stalemate, Consolidation Expected to Continue
Market Performance
According to Bybit data, Bitcoin attempted to push higher yesterday but was rejected at the MA30, subsequently finding a floor around the MA5 and MA13. This price action underscores the ongoing battle between buyers and sellers, pointing to continued sideways movement. BTC is up 0.04% in the past 24 hours, while ETH has gained 0.33%.
Data Observations
CoinMarketCap data shows Bitcoin's dominance remains steady at 40.0%, unchanged from yesterday. The Fear & Greed Index from Alternative.me sits at 27 (down from 28), indicating persistent extreme fear in the market. According to OKLink, Grayscale's GBTC discount holds at -46.1%, showing little movement. Bycoin data indicates BTC's funding rate is currently -0.007% (versus +0.001% yesterday), signaling a slight increase in short positioning in the futures market. Bitcoin's RSI 14 is at 47.5 (up from 46.7), suggesting a minor easing of buying pressure.
Macro News
The Boston Fed and MIT have concluded their CBDC research initiative, "Project Hamilton";
FTX's Bitcoin wallet balance has dwindled to nearly zero, holding just 0.12 BTC;
Fidelity has filed trademark applications covering NFTs, the metaverse, and virtual real estate investment services;
II. Sector Highlights — Terra Leads Daily Gains; Metaverse and Web3.0 Named Among 2022's Top Tech Buzzwords
The top five gaining sectors in the crypto market are: Terra Ecosystem (+5.3%), Liquid Staking Governance Tokens (+4.0%), XDC Ecosystem (+2.9%), Algorand Ecosystem (+2.8%), and Yearn Ecosystem (+2.8%).
Institutional Investment Sector
The top three gainers in the A16Z Portfolio sector over the past 24 hours are: XRP, AR, and ROSE.
The top three gainers over 24 hours in the Coinbase Ventures portfolio are: INST, BICO, LUNC.
The top three gainers over 24 hours in the DCG portfolio are: OCEAN, DG, HFT.
The top three gainers over 24 hours in the Pantera Capital portfolio are: GTO, LUNC, PTF.
The top three gainers over 24 hours in the Animoca Brands portfolio are: GARI, WWY, PNT.
Sector News
Metaverse and Web3.0 were named among the top ten tech buzzwords of 2022.
BitKeep has frozen some of the funds transferred by the hacker and is urging affected users to cooperate with its investigation team.
HSBC has filed trademark applications related to NFTs and the metaverse.
Nexo denies abandoning its acquisition of Vauld and has submitted a final revised proposal to Vauld's creditors.
Kraken has launched the beta version of its NFT marketplace.
III. Major Token Price Action — LUNC sees notable surge; BitDAO community votes on $100M BIT buyback proposal
Among the top 100 cryptocurrencies by market cap, the top five gainers are: LUNC (8.5%), QNT (6.5%), LDO (6.4%), XDC (4.7%), XRP (3.8%).
Price Action by Sector
Top three gainers in DeFi: REN, LUNC, OCEAN.
Top three gainers in NFTs: GARI, WWY, PNT.
Top three gainers in Play-to-Earn over the past 7 days: WOW, WWY, MCRT.
Today's five most trending tokens are: BTC, MATIC, SHIB, LUNC, CAKE.
Major Tokens
A new Compound proposal seeks to adjust borrowing limits and collateral factors for lending markets, including BAT and COMP.
Wintermute executed over $250 million in arbitrage trades during the Terra collapse, generating tens of millions in profit.
The BitDAO community has begun voting on a proposal for a $100 million BIT buyback program.
IV. Derivatives Data — Long positions dominate BTC futures, signaling strong short-term bullish sentiment
Data from CoinGecko shows that as of 13:00, the BTC long/short ratio on BitMEX was 58.17% long to 41.83% short, indicating a market dominated by bullish positions. The ratio of long to short holders has also been trending upward. Overall, long positions are prevailing in the BTC futures market, the holder ratio is increasing, and short-term bullish sentiment for BTC is strengthening.
V. Influencer Views — Exchange Reserves Drop by ~550,000 BTC
The OKLink Research Institute released its "2022 Global Blockchain Ecosystem Security Landscape Report." According to the report, OKLink monitored 275 blockchain-related security incidents in the first 11 months of 2022—a 30% year-on-year increase from 2021. However, total losses amounted to approximately $2.769 billion (nearly RMB 20 billion), down roughly 50% year-on-year. Around 90% of these incidents occurred on ETH (47%) and BSC (41%), while 95% of the losses were concentrated on just three chains: ETH (65%), SOL (20%), and BSC (10%). Furthermore, over 80% of security-related losses stemmed from the DeFi and cross-chain bridge sectors. DeFi incidents alone accounted for more than half of both the number of incidents and the total value lost. Five of the top 10 costliest security incidents in 2022 involved cross-chain bridges. Phishing attacks (27%) were the most common attack vector in the blockchain ecosystem last year, while losses due to private key leaks or loss represented the single largest source of financial damage.
Glassnode data reveals that 450,000 BTC held on exchanges or in hot wallets have been moved to cold storage this year, contributing to an overall reduction in exchange reserves of approximately 550,000 BTC. This brings the proportion of BTC held on exchanges below 12% of the total supply. Key movements include: Binance reducing its BTC holdings by 90,000 BTC over a 7-day period in December; FTX decreasing its holdings by 70,000 BTC over two weeks in June; and Coinbase shedding 200,000 BTC within just four days in November.
VI. Research Report Interpretation — Bitcoin to Surpass the Euro; EU Must Adapt
Messari published a research report arguing that Bitcoin will surpass the euro. Here are the key takeaways:
1. We are in a race to see whether more central banks in emerging markets will start accumulating BTC, or whether major reserve-currency nations will move to suppress this innovation. Pro-crypto voices are now emerging in unlikely places, such as Harvard's Economics Department. Thus, despite intense market pressure this year, we are closer to success than ever.
2. Bitcoin will surpass the euro—and Brussels had better learn to deal with it.
3. On crypto mining: Bitcoin mining must become cleaner and more sustainable.
4. In an environment of persistently rising interest rates, many corporate treasurers may be hesitant to add Bitcoin to their balance sheets. With no sign of a major shift in the Federal Reserve's monetary policy, Bitcoin's next demand surge is likely to come from the global government level, not from large corporations.
5. The inherently public nature of most blockchains may create opportunities for privacy-focused networks. In the upcoming privacy arms race, we are most bullish on Zcash and Monero, with particular emphasis on Zcash.
6. Stablecoins should become a leading U.S. export. Despite some authoritarian and paternalistic tendencies in the U.S. Congress, America will continue to lead globally in technology, finance, and crypto.
7. On over-collateralized stablecoins: Although Dai's supply has halved from its March 2022 peak to $5 billion, it has once again demonstrated resilience. Despite repeated shocks to crypto lending, MakerDAO and Dai have experienced no material issues or de-pegging events.
8. On algorithmic stablecoins: The current stablecoin market is highly chaotic, but crypto still needs new algorithmic stablecoins to succeed. We believe an inflation-resistant algorithmic stablecoin will emerge.
9. What could be worse than a $60 billion algorithmic stablecoin collapse and bankruptcy? A CBDC. A CBDC is equivalent to the FAA personally piloting aircraft and building jet engines, rather than defining competitive, rules-based air safety corridors.