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Gate.io Blog Daily Flash | Number of Bitcoin Holders Has Been Rising Despite Bear Market, McDonald‘s Begins To Accept Bitcoin and Tether In Swiss Town

Daily Flash | Number of Bitcoin Holders Has Been Rising Despite Bear Market, McDonald‘s Begins To Accept Bitcoin and Tether In Swiss Town

05 October 10:13

Fundamental and Technical Outlook

👓 Macro

For the past few months, a bear market has dawned on the market, bleeding red across the top one hundred assets and dipping the total market cap below the one trillion thresholds. However, as Bitcoin's correlation to stocks and bonds progressively continues to weaken, the market has begun to rebound and demonstrate minor growth or horizontal trading patterns. Stocks began to tick lower across recent weeks, closing the quarter at detrimental lows, with UBS noting that Bitcoin abandoned its typical beta of 3x to major US stock indices that dropped twice as much during September. The correlation between Bitcoin and stocks has further declined across the past week with the Nasdaq correlation falling to 0.77 and the S&P falling to 0.75. However, Bitcoin’s correlation with gold has reached its highest level in over a year, in spite of criticisms regarding gold as an asset that has failed to be a hedge against inflation in recent macroeconomic climates.

Over the past few weeks, the entire global economic stage has descended into a bearish landscape, including the likes of DeFi and TradFi (traditional finance) respectively. Yet, this decline has extended throughout the entirety of 2022 for the US stocks market, with the Nasdaq 100 dropping 33% and the Dow Jone Industrial Average losing more than 20% across the entire year, with Q3 bleeding the markets at an unprecedented rate. However, it appears that Q4 will cast a similar dismal outlook for the stock market, all whilst cryptocurrencies begin to rebound.

However, the bear market extension appears to have slowed for the likes of Bitcoin, with more investors pouring into the asset, hiking up the trading volume and increasing the number of Bitcoin holders substantially. Despite the resistance of $20,000 and the uncertain short-term future price trajectory, investors have been seeking solace in Bitcoin as a safe haven asset in light of international hyperinflation. There are now over 42 million addresses tightly clutching onto their Bitcoin bags, up a significant 4.5 million from the previous year.

Despite displaying only modest gains or losses, the cryptocurrency market has begun to exude a sense of calm, with a majority of assets trading horizontally or beginning to display minor gains and losses in single-figure percentages. For example, across the past week, Bitcoin has only lost 0.46%, while Ethereum has only declined by 2.70%. This more positive sentiment has begun to infiltrate the remainder of the market, with a majority of the top 50 assets being privy to an uptick across the past week.

Both Bitcoin and Ethereum have seen minor gains across the past day, with Bitcoin gaining a promising 3.56% and Ethereum gaining 2.36%. Both assets seem to be forming a more stable price trajectory, with Bitcoin still pushing above the resistance of $20,000 and Ethereum having managed to claw above the $1,300 resistance to a healthy $1,350.81.

🟠 BTC Daily Timeframe

Bitcoin is trading significantly above its 1-day SMA. Source, Coinmarketcap.

Over the past week, Bitcoin has begun to break free from the confines of the bear market, finally moving above the resistance level of $20,000 and permeating the 7-day SMA and, for the most part, remaining consistently above this threshold. Having entered the week at $19,270, Bitcoin has since pushed towards $20,200 and remained consistently between the bounds of $19,200 and $20,200, with ephemeral dips into the $18,000 region as witnessed on the 28th.

On a daily timeframe, Bitcoin is trading above the previously established daily support zone of 19,406 and $18,532. However, analysts speculate that it is pushing to a new daily support zone, which can be estimated to be between $19,200 and $20,100.

Bullish Scenario

Experts have forecasted that based on previous Bitcoin trends an extreme price correction is imminent in Q4, predicting that a correction of 20-30% is nigh and that Bitcoin is also at a pivotal entry point for bullish investors, signalling that this key support level could be lifted provided this bullish momentum extends to Bitcoin. As a result, various analysts have begun to speculate that October could be a pivotal time for Bitcoin, with previous years having indicated that Bitcoin typically inflates in value by 24% across October – leaving many with a bullish sentiment regarding the coming month.

If this correction occurs, experts forecast that highs of $25,000 could be reached once again, establishing a new floor for Bitcoin from which it can continue to build its valuation. This could be furthered providing the current shift of investor focus remains fixated on Bitcoin as a safe haven asset, potentially signalling that an influx of trading volume and buying power could enter the market and contribute to an uptick in value.

Bearish Scenario

With the fear and greed index having indicated that the market is in a state of extreme fear for an extended period of time, strong selling pressure is rearing its head and could lead to bears breaking through the support level further providing they succumb to the pressure. This has been witnessed throughout the week as the valuation has been consistently forced below the 7-day SMA.

Weekly Timeframe

Bitcoin is testing the $20,000 resistance. Source: Coinmarketcap
In terms of technical outlook on a weekly timeframe, Bitcoin is currently trading between the upper bounds of $18,500 and the lower bounds of $20,300 and is consistently trading above its 7-day SMA.

With the current valuation suggesting that Bitcoin is pushing against the resistance zone of $20,000 and is regaining strength, as well as investor interest, this could signpost a more bullish trajectory for the asset in the coming days.

However, based on the current chart activity, it is likely that Bitcoin will continue to trade beneath the resistance of $20,000 following a more horizontal pattern, with brief spikes allowing it to further test the level.

🔵 ETH Daily Timeframe

Bullish Scenario

ETH is trading in a progressive incline below its 1-day SMA. Source: Coinmarketcap

ETH is currently trading consistently above its 1-day SMA in a continuous incline following a bearish scare last week whereby a mass sell-off from whales caused Ethereum to dip beneath its key support levels of $1,300. In a quick rebound, Ethereum has pushed past the $1,300 threshold and is soaring towards $1,400.

Despite the sell-off, bulls are attempting to climb above the current point of resistance, which is acting at $1,325. Additionally, Ethereum’s 14-day RSI is also consolidating this and is teetering below a ceiling of 41.00, which could positively correlate with the 10-day moving average being positioned for a price increase, however, this will only be made possible provided that the ceiling on the RSI indicator is broken.

Bearish Scenario

With Ethereum facing a resistance point below its current support, this could indicate that the bear market is far from over for Ethereum. This is furthered by the way in which whales and opportunists continue to sell their bags at any positive price point, further accelerating Ethereum into a bearish spiral.

Weekly Timeframe

Ethereum has broken through its 7-day SMA. Source: Coinmarketcap

In terms of a technical outlook on a weekly scale, Ethereum is pointing towards a volatile market space in which bearishness appears to override any bullish price activity. Ethereum appears to be gaining some momentum, gradually pushing through its 7-day SMA, with ephemeral dips below, signposting that the current bearish trajectory may be beginning to slow. Providing Ethereum can gain some momentum, it is possible that it can continue to test the current resistance of $1,325 and push above its key support level.

📌 The Topic of The Day
McDonald's Begins To Accept Bitcoin and Tether In Swiss Town

As international crypto payments adoption has begun to wane, McDonald’s has become one of the biggest brands to begin participating in a crypto-friendly experiment in the Swiss town of Lugano. The 63,000 populated town located in the Italian-speaking territory of Switzerland is among one of the first regions to participate in a crypto-adoption trial in such a way, thus highlighting the region as a hotspot for crypto adoption in Europe. This comes in light of the city of Lugano beginning to recognise Bitcoin, Tether, and LVGA as legal tender.

The multinational food chain has introduced digital kiosks into their restaurants in the area, as well as increased functionality at their existing tills so that customers can purchase their food using either Tether or Bitcoin using an app that facilitates seamless cryptocurrency payments. More than 200 shops in the local area have now begun to facilitate cryptocurrency payments.

However, adoption in the area doesn’t cease here. On March 3rd, the city signed a memorandum of understanding with Tether Operations Limited, in order to launch a ‘Plan B’. In accordance with this plan, Tether has agreed to create two separate funds – the first being a $106 million one (or 100 million Swiss Francs) acting as an investment pool for crypto startups, and the other being a $3 million (or 3 million Swiss Francs) fund to encourage adoption of cryptocurrencies across local businesses.

In addition to allowing Lugano residents to pay their taxes in cryptocurrency, the project will extend this to the likes of parking tickets, public services, and tuition fees for students.

🗒 Happenings of the Week (Sept.28 - October 4)

🔹 Christine Lagarde, president of the European Central Bank (ECB) said on Wednesday a digital Euro will not be used for commercial purposes and would protect people from data collection. The central bank announced the five partner companies that will help build the trial payment system earlier this month. The evaluation and results of the project are expected in March 2023.

🔹 A daily transaction cap for non-euro stablecoins has been reinserted into the European Union’s draft rules for cryptocurrencies. The newly reinstated provision puts a cap on how much foreign currency-backed tokens are allowed to be transacted within one day. The European Parliament’s Committee on Economic and Monetary Affairs is scheduled to vote on the legislation in October or November.

🔹 Interbank messaging service SWIFT has linked up with Chainlink Labs on a cross-chain interoperability proof-of-concept project. Chainlink oracles allow on-chain smart contracts and applications to utilize off-chain data in a secure and decentralized manner. It recently announced the SCALE program to grow decentralized application ecosystems in the Layer 1 and 2 space by helping with access and cost barriers to oracle services and configurations.

🔹 Lightning Labs releases initial Taro protocol code. This will allow users to issue and transfer assets on the Bitcoin blockchain and Lightning. The company first launched Taro, a Taproot-powered protocol, in April. Lightning Labs was founded in 2016 and has raised money from Square CEO Jack Dorsey and Robinhood CEO Vlad Tenev.

🔹 Terraform Labs Founder Do Kwon says he's 'making zero effort to hide' but declined to disclose his exact whereabouts. On Monday, South Korea says Interpol has issued a red notice for Do Kwon. Terraform Labs executives are wanted by the government for allegedly breaking capital market laws, following the $40 billion collapse of luna and terraUSD. On Tuesday, the Luna Foundation Guard (LFG) refuted claims from a CoinDesk report that suggested a wallet was set up for the LFG on Binance this month and linked to 3,313 BTS that authorities have sought to freeze.

🔹 IMF calls on global financial watchdog to lead crypto regulation push. Two new reports by the International Monetary Fund (IMF) on regulating stablecoins and unbacked cryptoassets have called on the Financial Stability Board (FSB) to set and lead global efforts on crypto regulation. The FSB reports to G20 officials.

🔹 Australia’s CBDC pilot is looking for industry participants to make submissions on CBDC use cases. Dubbed the “eAUD,” the pilot is currently in the research stages and will be tested by participants in January next year. Last week, The People’s Bank of China announced it was extending the trial of e-CNY to several new provinces including Guangdong and Sichuan.

🔹 California Governor Gavin Newsom vetoed a bill that would create a license for companies operating in the crypto space. Newsom wrote in a Sept. 23 letter to the California State Assembly, “A more flexible approach is needed to ensure regulatory oversight can keep up with rapidly evolving technology and use cases, and is tailored with the proper tools to address trends and mitigate consumer harm.”

🔹 Disney is hiring transaction lawyer for 'aggressive' NFT and DeFi plans. Disney CEO says the conglomerate is focused on “next generation storytelling.” Last year, it dropped the Walt & Mickey “Partners” NFT on the VeVe app for iOS and Android.

🔹 Ethereum gas fee has reached a two-year low. The number of users, transaction count on Ethereum, and transaction count on Layer 2s remain on a positive upward trajectory. Notably, interest in speculative NFT buying has dropped significantly.

🔹 China GPU prices drop to new lows after the Ethereum Merge. The Nvidia GeForce RTX 3080’s price dropped from $1118, or 8,000 yuan, to 5,000 yuan within three months, according to a Chinese merchant.

🔹 Hacker steals $950,000 from crypto vanity address as exploits continue. Hackers are continuing to steal cryptocurrency created by a tool called Profanity. The latest hack comes after Wintermute lost $160 million as a result of this issue.

🔹 Solana endures another decimating outage that causes the network to require a mainnet reboot. As a result, the SOL token has lost 4.12% of its value over the past day alone.

🔹 Federal reserve governor, Michelle W. Bowman, has stated that cryptocurrency activities raise a ‘significant number of issues’, particularly for the traditional banking sector. Bowman also stated that the regulatory landscape needs to be better prepared to handle the ‘emerging technology’ as it reimagines finance.

🔹 The US stocks market has witnessed the most substantial quarterly decline since the likes of the 2008 financial crisis. This comes in light of Bitcoin further decoupling from the stock market and being regarded as a more inflation-proof asset.

🔹 Transit Swap suffers a decimating hack, whereby $21 million is stolen overnight. However, following negotiation initiatives, TransitSwap have been able to recover 70% of the total lost funds from two addresses.

🔹 Kim Kardashian is charged by the SEC for breaking securities laws by failing to disclose her compensation for endorsing EthereumMax. As a result, Kardashian has been ordered to pay a $1.26 million penalty.

🔹 The Philippine Peso has reached historic lows against the dollar, but is trading at a healthy rate against Bitcoin.
Bitcoin has reached a year-high correlation with Gold. This comes in light of international criticism regarding Gold failing to act as a hedge against inflation.

🔹 In the town of Lugano, a multinational fast food corporation, McDonald’s, has begun to accept cryptocurrency payments for their goods and services. This comes in light of 200 other businesses in the area faciloitating cryptocurrency payments.

Author: Gate.io Researcher Matthew Webster-Dowsing
This article represents only the researcher's views and does not constitute any investment advice.
Gate.io reserves all rights to this article. Reposting the article will be permitted provided Gate.io is referenced.
In all other cases, legal action will be taken due to copyright infringement.
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