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Gate.io Blog Daily News | The Silence Has Been Broken, Crypto Tanks With The Rest Of The World

Daily News | The Silence Has Been Broken, Crypto Tanks With The Rest Of The World

08 December 09:45



Fundamental & Technical Outlook:

Macro


🥂 Good morning, today is Thursday, Dec. 08, 2022.


TL;DR

🔹 Crypto markets fell on the seventh session after six days of going nowhere. Notably, it’s not all bad news considering rangebound trading usually occurs when buyers and sellers come to a deadlock, implying the move down will provide both sides more room to prep for their next advance, or decline.

🔹 The S&P 500 edged lower Wednesday, extending losses in every session since Nov. 30, and dragging the world with it. The yield-curve spread between the 10-year and 2-year US Treasuries suggests that the Fed’s monetary policy tightening cycle is almost over.

🔹 This week, traders are awaiting Friday’s US Producer Price Index -- one of the final pieces of data Fed officials will see before their Dec. 13-14 policy meeting. Additionally, an update on the consumer price index is due next Tuesday, right before the Fed’s final policy meeting.

🔹 The topic of the Day: You Just Can’t Kill Bitcoin, Period

🔹 Happenings of the Week: Bank of Russia wants to ban miners from selling crypto to Russians; Kazakhstan’s new legislation would put in new licensing regimes for crypto miners; Canadian pension plan CPP Investments ended a research effort into crypto markets; Coinbase CEO Brian Armstrong expects revenue to fall 50% or more from $7 billion of revenue in 2021…


As of Dec. 07 23:00 UTC,

⚡️ Bitcoin (BTC) 24-Hour Change: 16,846 (-1.30%)

⚡️ Ether (ETH) 24-Hour Change: 1,230 (-3.05%)

The Doom&Gloom Continues, US Treasury Yield Curve Widens, Crypto Tanked

On Wednesday, the crypto markets finally took a dive after six consecutive sessions of stagnant performance. However, it’s not all bad news considering rangebound trading usually occurs when buyers and sellers come to a deadlock, meaning the move down will provide both sides more room to prep for their next advance, or decline. For detailed analysis, scroll down to the technical analysis section of this article.

Meanwhile, the US equity market came under pressure once again, dragging down the rest of the world with it. In a session marked by unnerving swings in both directions, the S&P 500 suffered a fifth straight loss.

As for commodities, oil fell for the third session, effectively erasing its 2022 gains on easing demand for fuels. Gold rose for the third consecutive session, implying the traditional haven was gaining momentum.

According to Bloomberg Economics, if China is fully open by mid-2023, energy prices will increase by 20% and the US consumer price index, which they believe may drop to 3.9% by midyear, may jump to 5.7% by yearend.

Elsewhere, economic jitters were palpable among bond traders, with a key segment of the US curve reaching a four-decade extreme. Treasury 30-year yields sank to the lowest since September. Bond-market gauges of inflation expectations have declined in recent weeks.

The yield-curve spread between the 10-year and 2-year Treasuries suggests that the Fed’s monetary policy tightening cycle is almost over. That’s either because a recession is imminent or because inflation is likely to keep falling. From Morgan Stanley to JPMorgan Chase., strategists warned that the bear market has yet to run its course, citing the threat of a profit contraction and more restrictive monetary policy from the Fed.

This week, traders are awaiting Friday’s US Producer Price Index -- one of the final pieces of data Fed officials will see before their Dec. 13-14 policy meeting. Additionally, an update on the consumer price index is due next Tuesday, right before the Fed’s final policy meeting.

P.S. If you’d like us to cover any specific macro data, or to expand upon technical analysis on your favorite coin, feel free to drop a message in our Reddit community. - Peter L.


💡 Today's Markets at Dec. 07 22:50 UTC

BTC -0.76%; Ether -1.83%.

Asia: Japan -0.72%; Hong Kong -3.22%; China -0.40%; India -0.44%.

Europe: London -0.78%; Paris -0.41%; Frankfurt -0.57%.

US Spot Indices: Dow 0.00%; S&P -0.19%; Nasdaq -0.51%.

US Index Futures: Dow -0.02%; S&P -0.21%; Nasdaq -0.49%.

US Two-year Treasury down 10bps at 4.264%.

US Ten-year Treasury down 11bps at 3.420%.

UK Ten-year Government down 3bps at 3.049%.

US Dollar Index -0.30% at 104.87.

FX in 24hrs: GBP: +0.63%; EUR: +0.47%; JPY: -0.37%; CNY: -0.33%.

Gold +0.88% at 1,785; Brent Crude -4.02% at 79.35.

🗓 Catalysts this week

  • Monday: US ISM Non-Manufacturing PMI
  • Tuesday: Australia RBA Interest Rate Decision, Canada Balance of Trade, US Balance of Trade, Canada PMI
  • Wednesday: Australia GDP, China Balance of Trade, India RBI Interest Rate Decision, Canada BoC Interest Rate Decision
  • Thursday: Australia Balance of Trade
  • Friday: China Inflation Rate, US Producer Price Index, US Michigan Consumer Sentiment


🏦 BTC

BTC Weekly timeframe:

  • Major Level: 13,965 (Monthly High of Jun. 2019)
  • Closest support zone: 16,845 - 16,430
  • Key resistance zone: 17,085 - 17,715



Analysis as of Dec. 08 - Dec. 11 Session.

Note: On Wednesday, Bitcoin has finally broken below and entered the nearest support zone.

Within the support zone, there’s a minor support level: the 23.6% ($16,690) weekly Fibonacci Retracement level (measured from Nov. 7 - 14).

The decline isn’t necessarily a bad thing as it happens to break the stagnant period from the last six sessions, effectively allowing both buyers and sellers to regroup.


BTC Weekly Resistance zones

  1. 17,085 - 17,715
  2. 17,875 - 18,245
  3. 18,890 - 19,085


BTC Weekly Support zones

  1. 16,845 - 16,430
  2. 16,185 - 16,010
  3. 15,525 - 15,200


BTC Daily Timeframe:

  • Closest support zone: 16,875 - 16,635
  • Closest resistance zone: 16,990 - 17,205
  • Key Level: 15,952 (Weekly Close Between Nov. 02 - 09, 2020)



Dec. 07 21:47 UTC Update:

Bitcoin (BTC) was trading at $16,811, or -1.07% in a 24hr period.

Note: On the daily timeframe, we can see that Bitcoin broke within the nearest support zone on the seventh session, but rebounded from the 141% ($16,680) level of a daily Fibonacci Extension zone (derived from Dec. 01).

If it breaks below this extension zone, the next target zone/minor support zone will be between 16,565 - 16,410 (daily Fibonacci Extension zone derived from Dec. 07), which serves as a buffer area before the next major support zone (16,300 - 16,010).

Volumes on Dec. 07 have increased quite a bit with the sellers gaining an advantage. Notably, the surge in volumes was comparable to Nov. 30 uptick candle, implying it took more sellers to bring down BTC.


BTC Daily Resistance zones

  1. 16,990 - 17,205
  2. 17,370 - 17,575
  3. 17,645 - 17,805


BTC Daily Support zones

  1. 16,875 - 16,635
  2. 16,300 - 16,010
  3. 15,860 - 15,780


🌐 ETH

Weekly Timeframe

  • Major Level - 757 (Monthly High of Dec. 2020)
  • Closest support zone: 1,265 - 1,220
  • Key resistance zone: 1,280 - 1,330



Analysis as of Dec. 08 - Dec. 11 Session.

Note: Per analysis from yesterday, “Ether was still holding above the 38.2% ($1,240) monthly Fibonacci Retracement level (measured from Oct. 2020 - Apr. 2021) as of Wednesday, though at this point ETH seemed likely to touch upon the level soon.”

As of Thursday, ETH has broken below the 38.2% monthly Fibonacci level, though the outlook hasn’t changed. There are still three ways we could go about in terms of reacting to the Fibonacci level.

  1. ETH pushes through and targets the 50% monthly Fibonacci level ($965).
  2. ETH rebounds and targets the 23.6% monthly Fibonacci level ($1,695).
  3. ETH remains stagnant and moves up and down between the 38.2% Fibonacci level ($1,240), which in turn becomes an accumulation period in preparation for a bigger move.


ETH Weekly Resistance zones

  1. 1,280 - 1,330
  2. 1,345 - 1,390
  3. 1,415 - 1,470


ETH Weekly Support zones

  1. 1,265 - 1,220
  2. 1,155 - 1,110
  3. 1,060 - 1,035


ETH Daily Timeframe

  • Closest support zone: 1,240 - 1,220
  • Closest resistance zone: 1,240 - 1,245
  • Key Level: 1,254 (Weekly close from Jan. 04, 2021 - Jan. 11, 2021)



Dec. 07 22:07 UTC Update:

ETH was trading at $1,230, or -1.96% in a 24hr period.

Note: Like its BTC counterpart, Ether has broken below the previously established tight trading range between $1,300 - $1,240 on the seventh session.

As mentioned in the analysis of ETH’s weekly timeframe, there are three ways ETH could go about reacting to the 38.2% monthly Fibonacci Retracement level. For now, the third option seems the likeliest, meaning the monthly Fibonacci level may be a focal point for which Ether moves up and down, which in turn becomes an accumulation period for a larger move.


ETH Daily Resistance zones

  1. 1,240 - 1,245
  2. 1,255 - 1,265
  3. 1,280 - 1,300


ETH Daily Support zones

  1. 1,240 - 1,220
  2. 1,215 - 1,195
  3. 1,175 - 1,155


📌 Today's topic: You Just Can’t Kill Bitcoin, Period


Governments will not succeed in blocking Bitcoin, though they will try.

Where it all started: When BTC emerged in 2009, it was largely ignored. Nobody had heard of it; it was hopelessly complicated and you barely use it to even buy a pizza.

- As it improbably grew and thrived, despite inevitable challenges, crises and missteps,
Bitcoin entered the second phase, that of ridicule: "Probably rat poison squared." said famed investor Warren Buffett in a 2018 Business interview.
- After the long Bitcoin winter of doldrums from 2018 to 2019, following its meteoric rise in 2016 from $16 billion to $266 billion in market cap, Bitcoin was again on the move and had survived another round of multiple 80% drops since its inception in 2009.

A Reminder of Recent Events: With the recent run up to $67,000 in late 2021, Bitcoin was shedding the phase of ridicule. Its market cap had reached $1.2 trillion, or about 3% of the size of the entire US economy.

- Over the last three years, the US government began cracking down on all cryptocurrencies. US regulators prohibited the launch of Initial Coin Offerings - designating these as illegal security offerings.
- The pressure was put on foreign crypto companies to prohibit them from catering to US investors. Governments across the world mobilized to put limitations on cryptocurrencies.
- The government of China took the most extreme measures, banning all crypto miners and crypto trading in 2021, with tight criminal enforcement against violators.

Why this matters: Governments derive their power from the ability to control the national currency. This is especially true of the United States. This is because the dollar is the de-facto global monetary standard. As such, the US government derives a tremendous amount of political power from its ability to control the dollar, and that power extends well beyond its national borders.

- Governments are made up of individuals, and those individuals cherish their positions of power and influence. They will not relinquish their monopoly over the currency without a fight.
- If Bitcoin catches on and more and more individuals can opt out of the national currency, exchanging into fiat currency only to settle their tax payments, this would represent a tremendous decrease in the power of central governments.

Bitcoin, Going Forward: No one can predict for certain where any asset is headed, but the short answer is temporarily down while the recent FTX fiasco plays out and drags down most of the crypto industry. Not to mention a world suffering from high inflation with no choice but to rely on the Federal Reserve.

- Bitcoin
may drop to the $10k support level. There is even a minute chance that it can go as low as $3k.
- But then Bitcoin will be the proverbial Phoenix soaring from the ashes to new as yet unclaimed heights. Remember the old adage: "What doesn't kill you makes you stronger". That's Bitcoin.


👁 Happenings of The Week (Dec. 03 - Dec. 07):


📣 Notables

🔹 SBF: “…once I have finished learning and reviewing what happened…I'm not sure that will happen by the 13th. But when it does, I will testify (before congress).”

🔸 12.05: Congresswoman Maxine Waters countered SBF’s statement and said he knows enough to testify before the House Financial Services Committee.

🔸 12.06: SBF hires Mark Cohen, a high-win-rate attorney who represented Ghislaine Maxwell, former wife of the infamous sex trafficker Jeffrey Epstein.

🔸 12.07: Senior members for the House Financial Services Committee are weighing whether to subpoena former FTX CEO SBF.

🔹 Through MiCA, all EU member states will have the power to “bring down advertisements and websites for unauthorized crypto venues” -- unauthorized included all offshore crypto companies.

🔹 UK is finalizing its plan for crypto regulation. According to the Financial Times, those changes include, “limits on foreign companies selling into the UK, provisions for how to deal with the collapse of companies, and restrictions on advertising products.”

🔹 A leaked draft of the European Commission’s new taxation directive, set to be published later this week, suggests it could bring in €2.4 billion for the EU and seeks to close the “regulatory gap” for crypto users by removing tax evasion opportunities as well as to ensure member states avoid a tax shortfall.

🔹 Paraguay legislature strikes down crypto mining bill. Specifically, the bill would cap electricity rates for mining by recognizing it as industrial activity.

🔹 Kazakhstan, which boasts one of the world’s largest crypto mining operations, approved the second reading of a bill "On the Digital Assets of the Republic of Kazakhstan.” The new legislation would put in new licensing regimes for crypto miners. In addition, miners would also have to purchase their electricity from the shared grid at market rates through energy provider Korem.

🔹 Bank of Russia wants to ban miners from selling crypto to Russians. The Russian central bank supports the idea of legalizing the crypto mining business, but only if miners sell their coins to non-residents of Russia.


📣 Dec. 07

🔹 Crypto-friendly Signature Bank is placing caps on deposits from clients in the digital assets industry, adopting a per-client deposit cap of at most 2% of total bank deposits.

🔹 Canadian pension plan CPP Investments ended a research effort into crypto markets. CPPI, which manages roughly $388 billion for 20 million Canadians, did not have any direct investments in crypto.

🔹 Fintech firm Plaid, which connects banks and fintech firms, laid off about 260 employees due in part to the “current economic slowdown.”

🔹 Coinbase CEO Brian Armstrong expects revenue to fall 50% or more from $7 billion of revenue in 2021. He blamed the state of the industry and shaken investor confidence in the wake of the recent collapse of rival FTX.

🔹 FBI arrested blockchain startup CTO Rikesh Thapa, a former executive at Blockparty, for alleged wire fraud. The complaint says Thapa used funds for personal expenses that included “nightclubs, travel, and clothing.”

🔹 ConstitutionDAO2 selling NFTs in a fresh bid to buy a US Constitution copy. They failed to buy a similar artifact last year.

🔹 ImmutableX NFTs are now available on Nifty Gateway, which includes Gods Unchained NFTs, which was one of the top five most traded NFTs by volume in September.

🔹 Hashflow partners with Wormhole for cheaper cross-chain crypto swaps.

🔹 Video game company Atari is collaborating with Pixels for print-on-demand NFT artwork.

🔹 Crypto infrastructure firm Blockstream is looking to raise fresh funds at a lower valuation, stripping it of its previous unicorn status valued at $3.2 billion.

🔹 London-based crypto custodian Zodia Custody, a subsidiary of UK investment bank Standard Chartered, rolled out a new service to help protect client assets from exchange insolvency.

🔹 Old-school media player Winamp now supports Ethereum and Polygon-based music NFTs in its latest desktop update.

🔹 North Korean hackers created a bogus crypto exchange that infects users’ internet-connected devices with malware, allowing them to access sensitive networks to steal cryptoassets, says security provider Volexity.

🔹 Ethereum’s energy switch saves as much electricity as the entirety of Ireland uses. According to a paper published by peer-reviewed data-science journal Patterns, it most likely reduced the power consumption of the crypto network by 99.84 percent to 9.99 percent.

🔹 Over the last 30 days 200,000 BTC worth ~$3.4 billion have been moved off exchanges.


📣 Dec. 06

🔹 Goldman Sachs reportedly looking to buy crypto firms after FTX collapse.

🔹 Hedge fund Fir Tree files lawsuit against Grayscale.

🔹 Digital fashion and collectibles firm RTFKT, owned by Nike, will drop a phygital NFT mint of Nike-inspired shoes with web3 functionality.

🔹 Holders of Bored Apes and Mutant Apes are losing their staked apecoin because they failed to delist their paired NFTs before staking their tokens.

🔹 Staking for decentralized oracle network Chainlink is now live for early access users and will open fully on Dec. 8.

🔹 Vitalik Buterin: “At this point, (Open)AI is quite far from being a substitute for human programmers.”

🔹 Warner Music Group and Polygon have partnered with LGND.io on a new web3 music project.

🔹 Gaming retailer GameStop is cutting employees in e-commerce product, engineering, and blockchain efforts.

🔹 Hardware wallet developer Ledger debuts a new device named Stax, designed by iPod inventor Tony Fadell.

🔹 ConsenSys intends to store MetaMask user data for only seven days amid growing concerns about user data privacy.

🔹 a16z appoints ex-CFTC commissioner Quintenz as head of policy.

🔹 SushiSwap proposes to direct 100% of xSUSHI revenue to its treasury wallet.

🔹 Bitcoin Lightning network’s payment platform Strike enables payments to Nigeria, Kenya and Ghana for U.S. users through its “Send Globally” feature.


📣 Dec. 05

🔹 FTC told Bloomberg it is investigating several unnamed crypto companies for alleged deceptive advertising practices but didn’t provide any further details.

🔹 Nexus Mutual expects a $3 million loss from exposure to Orthogonal Trading’s $36 million default on Maple Finance.

🔹 Aave acquired Sonar to integrate its decentralized identity platform, Lens Protocol.

🔹 Coca-Cola has teamed up with Crypto dot com to release a collection of 10,000 World Cup NFTs based on heatmaps from matches.

🔹 Twitter’s Web app shows a potential new ‘Twitter Coin’ and Musk noted Twitter will need crypto payments.

🔹 Silvergate stock (NYSE:SI) down 8.5% on Monday. The bank disclosed FTX deposits made up nearly 10% of its $11.9 billion in deposits from digital asset customers.


📣 Dec. 04

🔹 Reddit Collectible Avatar minting hits all-time high.

🔹 Some CEXes are cutting jobs as the bear market deepens. Sunday, Bybit CEO announced it will be reducing its workforce. Monday, Swyftx has announced 90 job cuts in its second round of layoffs.

🔹 Genesis owes $900 million to another group of assorted creditors on top of the earlier reported $900 million to customers of Gemini, which tallies up to $1.8 billion.


📣 Dec. 03

🔹 Crypto derivatives exchange LedgerX (formerly known as FTX US Derivatives) is for sale.

🔹 Crypto brokerage Genesis owned by Digital Currency Group (DCG) owes $900 million to customers of crypto exchange Gemini.

🔹 Web Browser Opera will roll out an NFT creation tool next January.


📣 This week’s fundraising activities include but are not limited to:

🔹 Crypto hardware wallet maker Ngrave aims to raise $15 million led by Binance Labs.

🔹 DeFI Derivatives Protocol Perennial raised $12 million in seed funding in a round co-led by Polychain Capital and Variant. “Perennial is a derivatives protocol that offers a simple trading experience, a flexible and capital-efficient model for providing liquidity, and a developer primitive that makes composing DeFi derivatives easy,” according to its founder.

🔹 Cybersecurity startup Cyvers raised $8 million in a seed round led by Elron Ventures.

🔹 Uniswap-based perpetual options protocol Panoptic raised $4.5 million led by Gumi Cryptos Capital.

🔹 Game development platform The Mirror raised $2.3 million in pre-seed funding in a round led by Founders Fund. Based in Miami, the startup streamlines the creation of 3D multiplayer games set in virtual worlds.


📣 This week’s on-chain criminal activities include but are not limited to:

🔹 Infrastructure provider Ankr and stablecoin issuer Helio Protocol lost a total of $20 million in two attacks, according to on-chain analysis by security firm BlockSec. The first attack targeted a liquid staking token product run by Ankr, resulting in a loss of more than $5 million. In the second attack, someone acquired some 183,000 aBNBc tokens with 10 BNB ($2,900), which then were deposited into a BNB Chain-based stablecoin issuer Helio Protocol to drain funds. The attacker was able to borrow $16 million in the HAY stablecoin with a small amount of aBNBc collateral and subsequently swapped their HAY stablecoin for $15 million Binance USD (BUSD).




Author: Gate.io Researcher Peter L.
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.
ETH/USDT -1.69%
BTC/USDT -1.90%
GT/USDT + 7.99%
Bitcoin and Ether finally broke the silence and tanked. US equity markets continued to slump, effectively dragging the rest of the world with it. US treasury yield spread widens to a four-decade extreme, implying the Fed’s monetary policy tightening cycle is almost over -- an early sign of stagflation.
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