Good morning. Here’s what’s happening:
Market moves: Bitcoin stabilized near $43,000 after Wednesday’s sell-off, while traders’ attention turned to layer 1 tokens.
Technician’s take: Oversold signals remain intact for bitcoin, although upside is limited.
Catch the latest episodes of CoinDesk TV for insightful interviews with crypto industry leaders and analysis.
Ether (ETH): $3,407 -4.097%
S&P 500: 4,696-0.096%
DJIA: 36,236 -0.47%
Nasdaq: 15,080 -0.13%
Gold: $1,790 -1.09%
Bitcoin stabilized around $43,000 after it fell to near $42,000, while a few layer 1 tokens such as harmony (ONE), fantom (FTOM), cosmos (ATOM), and NEAR (NEAR) quickly turned to green despite Wednesday’s broader market sell-off.
Data from TradingView and Binance shows that most of the dumping events took place on Wednesday during U.S. trading hours. Notably, the price of the No. 1 cryptocurrency took only a small hit during Asian hours on Thursday.
Hong Kong-based crypto lender Babel wrote in its newsletter dated Jan. 5 that bitcoin failed to follow U.S. stocks’ “Santa Rally” in the last week of 2021, potentially because of China’s crypto trading ban. Dec. 31 was the deadline for many Chinese crypto exchanges to stop offering crypto trading services to users from mainland China.
Meanwhile, crypto Twitter shows that many traders have turned their attention to alternative cryptocurrencies (altcoin) trading, with a few layer 1 tokens having logged gains despite a broader crypto sell-off.
According to Messari’s asset screener, harmony, cosmos, fantom and NEAR – all are tokens associated with smart contract-platforms, are among some of the biggest winners on Thursday. Prices of harmony (ONE), for example, were up by 10.7% at the time of writing.
Crypto traders continued to bet on the success of layer 1 tokens, as solana, terra and avalanche last year logged impressive price returns. Layer 1 blockchains have been one of the biggest narratives in the crypto industry, especially in the past few years. Their success came as Ethereum, the No. 1 blockchain by the total value of tokens locked in the smart contract, became too congested, leading to an increase in its transactions fees.
Bitcoin (BTC) dipped below initial support at $45,000 on Wednesday, but later stabilized around $42,000, which is near the Dec. 5 crash low. Oversold signals remain intact, which suggest selling pressure could subside.
Given the series of lower price highs since November, support ranges and oversold readings are viewed as countertrend. This lowers the probability of significant buying strength until the downtrend is reversed.
There is strong resistance ahead which could limit upside moves over the short term. For example, price momentum turned negative on the monthly chart, indicating a possible trend shift from bullish to bearish.
Further, bitcoin remains stuck below key moving averages and is roughly 35% below its all-time high around $69,000.
The cryptocurrency is down about 8% over the past week as buyers failed to sustain a break above $50,000.
2 p.m. HKT/SINGT (6 a.m. UTC): Germany Trade Balance (Nov. MoM)
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