🥂 Good morning, today is Friday, Dec. 16, 2022.

TL;DR

🔹 BTC, ETH continued to follow a global bearish mood, falling 5.8% and 6.7% from their respective Wednesday height. BTC’s inverse correlation with the dollar index and volatility index stood at -0.9 and -0.6, down from -0.34 and -0.08 a week ago; the latter (VIX) of which rose above the critical level of 22 yesterday.

🔹 Like the Fed on Wednesday, the ECB raised 50bps interest rate Thursday, although the global selloff mostly came from the US side, with the S&P 500 dropping 2.5%, while the Nasdaq lost 3.2%.

🔹 The topic of the Day: Blockchain Devs Down 60% in 2022

🔹 Happenings of the Week: A committee to represent creditors has formed in FTX bankruptcy case; A CBDC is a legislative priority for the European Union in the coming two years; First Hong Kong bitcoin, ether ETFs lure nearly $75 million with trading set to begin Friday; Donald Trump announced a new NFT collection on his official Truth Social account…

As of Dec. 15 23:22 UTC,

⚡️ bitcoin (BTC) 24-Hour Change: 17,329 (-2.68%)

⚡️ Ether (ETH) 24-Hour Change: 1,262 (-3.55%)

Global Markets Slumped As Traders Reposition Themselves, ECB Raised 50bps Interest Rate

Following global bearish sentiment, both BTC and ETH took a deep dive from their respective height Wednesday, dropping more than -5.80% and -6.70%, respectively. bitcoin’s correlation coefficients with the S&P 500 index (SPX) and the Dollar index (DXY) stood at 0.08 and -0.90, up and down from 0.04 and -0.34 a week ago.

Whenever equities fall, the dollar rises; the inverse correlation with bitcoin implies its direct impact. Friday, Asian equities are poised to drop as hawkish signals from central banks sparked a rout in US and European equities and a rally in the dollar. The Dow and SPX fell an average of 2.50%. The Nasdaq especially took a big hit and fell 3.2%.

The risk-off mood comes as central banks this week eased back from the larger hikes seen for much of this year but revised up their expectations for how high rates may need to go. Fed Chair Jerome Powell and ECB President Christine Lagarde hammered home their resolve to remain persistent as they battle inflation, which didn’t sit well with investors hoping for a dovish shift in tone.

Thursday, the European Central Bank increased interest rates by a half-point and lifted the deposit rate more slowly to 2%, after successive hikes of 75 basis points. President Christine Lagarde told investors to prepare for a long-running campaign of similar moves to quell the worst inflation in the history of the euro.

Next week will be relatively quiet on the economic calendar. Before Friday’s US income and spending data come out, traders will likely reposition themselves in global markets, after having enough time to digest the Fed’s latest round of interest rate hike and Fed Chair Powell’s statement.

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. 14 23:23 UTC

BTC -2.69%; Ether -3.55%.

Asia: Japan -0.37%; Hong Kong -1.55%; China -0.25%; India -1.32%.

Europe: London +0.10%; Paris -3.09%; Frankfurt -3.28%.

US Spot Indices: Dow -2.25%; S&P -2.49%; Nasdaq -3.23%.

US Index Futures: Dow -0.03%; S&P -0.01%; Nasdaq +0.03%.

US Two-year Treasury up 3bps at 4.240%.

US Ten-year Treasury down 2bps at 3.450%.

UK Ten-year Government down 8bps at 3.249%.

US Dollar Index +0.96% at 104.17.

FX in 24hrs: GBP: -1.96%; EUR: -0.46%; JPY: -1.70%; CNY: -0.31%.

Gold -1.62% at 1,775; Brent Crude +2.50% at 82.70.

🧠 Catalysts remaining this week

• Friday: UK GfK Consumer Confidence, UK Retail Sales

🗓 Catalysts next week

• Monday: Germany Ifo Business Climate,
• Tuesday: Australia RBA Meeting Minutes, Japan BoJ Interest Rate Decision, US Building Permits
• Wednesday: Germany GfK Consumer Confidence, Canada Inflation Rate
• Friday: Japan Inflation Rate, US Personal Income & Personal Spending, US Durable Goods Orders

🏦 BTC

BTC Weekly timeframe:

• Major Level: 13,965 (Monthly High of Jun. 2019)
• Closest support zone: 17,175 - 17,090
• Key resistance zone: 17,700 - 17,875

Analysis as of Dec. 16 - Dec. 18 Session.

Note: Despite the plunge we saw yesterday and the day before, BTC still shows resilience at its current price. The weekly timeframe suggests we still have a bullish outlook going into next week as it has established a “higher-high” formation. However, the long tick on the weekly candle also suggests we may see some stagnation. For the bears, if we want to see a bearish outlook going into next week, then BTC will have to close below the nearest support zone (17,175 - 17,090) by Sunday EOD.

BTC Weekly Resistance zones

1. 17,700 - 17,875
2. 18,025 - 18,245
3. 18,455 - 18,755

BTC Weekly Support zones

1. 17,175 - 17,090
2. 16,875 - 16,430
3. 16,185 - 16,010

BTC Daily Timeframe:

• Closest support zone: 17,370 - 17,175
• Closest resistance zone: 17,450 - 17,560
• Key Level: 18,432 (Weekly Close Between Nov. 16 - 23, 2020)

Dec. 16 00:24 UTC Update:

bitcoin (BTC) was trading at $17,370, or -2.67% in a 24hr period.

BTC Daily Resistance zones

1. 17,450 - 17,560
2. 17,640 - 17,700
3. 17,805 - 17,875

BTC Daily Support zones

1. 17,370 - 17,175
2. 17,090 - 16,995
3. 16,875 - 16,800

🌐 ETH

Weekly Timeframe

• Major Level - 1,470 (Monthly High of Jan. 2021)
• Closest support zone: 1,265 - 1,240
• Key resistance zone: 1,280 - 1,330

Analysis as of Dec. 16 - Dec. 18 Session.

Note: Unlike BTC, Ether’s weekly candle suggests it may not be able to sustain a bullish outlook going into next week. If ETH is unable to close within the nearest resistance zone (1,280 - 1,330) by Sunday EOD, then it is very likely we will start off stagnant next week. On the other hand, if ETH closes within the nearest support zone (1,265 - 1,240), then we would see ETH making a second consecutive “lower-low” formation which gives out a bearish signal going into next week.

ETH Weekly Resistance zones

1. 1,280 - 1,330
2. 1,345 - 1,380
3. 1,390 - 1,415

ETH Weekly Support zones

1. 1,265 - 1,240
2. 1,220 - 1,180
3. 1,155 - 1,100

ETH Daily Timeframe

• Closest support zone: 1,265 - 1,260
• Closest resistance zone: 1,280 - 1,300
• Key Level: 1,347 (Weekly high from Jan. 04, 2021 - Jan. 11, 2021)

Dec. 16 00:40 UTC Update:

ETH was trading at $1,271, or -2.55% in a 24hr period.

ETH Daily Resistance zones

1. 1,280 - 1,300
2. 1,310 - 1,330
3. 1,350 - 1,380

ETH Daily Support zones

1. 1,265 - 1,260
2. 1,245 - 1,220
3. 1,215 - 1,195

📌 Today's topic: Blockchain Devs Down 60% in 2022

What’s happening: According to a report by CoinDesk, the number of daily active developers working on top blockchains and decentralized applications (dapps) has decreased roughly 57% this year, per data from Token Terminal. In January, about 3,700 daily developers were active, compared to almost 1,600 on Dec. 14, data from Token Terminal suggests, which tracks daily totals.

But why: ETH was recently trading at about $1,300, down 64% from the start of the year when the second largest crypto by market capitalization was still hovering near $4,000. The number of projects built on the Ethereum platform over this period has plummeted as some projects have failed and increasingly risk-averse investors have deployed their money at a slower rate than during 2021’s bull market.

What they’re saying: “It’s not surprising to see an overall decline in daily active devs,” said Chris Eberle, angel investor, and contributor at Coordinape and PleasrDAO who goes by DeFi Ginger on Twitter. “2022 has been punch after punch for crypto. The impact to the market and the overall brand of crypto is just brutal.”

Zoom in: With 192 developers as of Dec. 14, Ethereum currently has the most daily developers among blockchain protocols and dapps. Cardano and Cosmos rank second and third with 144 and 143 active developers, respectively. bitcoin, the largest cryptocurrency by market capitalization, currently has 18 active developers.

The Big Loser: According to Token Terminal, Solana saw the largest reduction from roughly 2,500 devs in January to 75 developers at the time of publication, although the protocol insisted in a tweet last month that thousands of developers are working on the platform.

The Takeaway: Overall, the number of active developers in the crypto space has stabilized between 1,500 and 1,600 since mid-summer, suggesting that a core of the determined, adequately funded people remain convinced of blockchain technology’s potential.

👁 Happenings of The Week (Dec. 13 - Dec. 15):

📣 Notables

🔹 Congressional committee confirms SBF as FTX hearing witness on Tuesday, Dec. 13.

🔸 12.10: U.S. prosecutors are reportedly laying the groundwork for a potential fraud case against SBF. In other news, the former Alameda Research head Caroline Ellison hired a former crypto regulator at the SEC to represent her in an ongoing federal probe.

🔸 12.12: Bankman-Fried 'unwilling' to accept subpoena, escalating Senate standoff.

🔸 12.13: SBF was arrested in the Bahamas. New FTX CEO John Ray III told lawmakers that there were no distinctions between FTX, Alameda Research, and other entities which filed for bankruptcy protection last month.

🔸 12.14: New FTX CEO John Ray III alleged that SBF, Gary Wang, and the Bahamian government have colluded to shield hundreds of millions of dollars worth of assets from U.S. court proceedings.

🔸 12.15: FTX asks court permission to sell off four businesses, including LedgerX. A committee to represent creditors has formed in FTX bankruptcy case.

🔹 Chinese authorities have arrested 63 people in association with a massive money laundering scheme that allegedly laundered 12 billion yuan ($1.7 billion).

🔹 The European Parliament’s crypto ally Eva Kaili was arrested following corruption allegations. She has played a major role in shaping policy on crypto assets and blockchain since 2018.

🔸 The Parliament voted to terminate crypto-friendly vice-president Eva Kaili’s term of office by a double majority.

🔹 The UK’s economic chief wants more investment in crypto businesses in the country and endorses work on a digital pound. The 30-point “Edinburgh Reforms” released on Friday morning is looking to vamp up the UK’s financial sector.

🔸 The Bank of England is seeking a proof of concept for a sample wallet for a CBDC and will take applications through Dec. 23. The budget range for the initial five-month contract is 200,000 pounds ($245,200).

🔹 Financial regulators such as the Korea Financial Services Commission and the Financial Intelligence Unit (FIU) are reviewing a proposal to include "direct approval by the regulator for tokens to go live on domestic crypto exchanges" in the Basic Act on Virtual Assets.

🔹 Argentina has established a National Blockchain Committee to implement a national blockchain adoption strategy. The Commission will be responsible for "acting as an interlocutor in the local blockchain ecosystem, improving the interoperability of blockchain technology", improving transparency in the investment of Argentine public funds, avoiding the forgery of identity documents, identifying other documents issued by institutions, etc.

🔹 Canada’s financial watchdog is enforcing stricter requirements for crypto firms following the collapse of FTX crypto exchange last month. Measures include separating client and proprietary business assets, ensuring client assets are held with an “appropriate custodian,” and prohibiting offering margin or leverage for Canadian users.

🔹 The Financial Stability Board reportedly has an operational plan for rolling out steps to regulate the crypto sector early next year. The collapse of FTX adds urgency to address crypto supervision, including decentralized finance.

🔹 Brazil Central Bank Plans to Launch a CBDC in 2024. In March the country selected nine partners to help it develop a digital currency. When the CBDC is issued, Brazil will join the Bahamas, Nigeria, Eastern Caribbean and Jamaica as nations that have already issued their own CBDCs.

🔹 OECD (Organisation for Economic Co-operation and Development) calls for ‘urgent policy action’ following a series of crypto firm implosions. While crypto firm failures didn’t affect traditional finance much, the OECD worries this may not be the case in the future if the digital asset industry grows.

🔹 Senators Elizabeth Warren and Roger Marshall are working together on legislation to tighten AML (anti-money laundering) rules around digital assets. The bill is unlikely to pass before this Congress ends in early January, but it could help shape the debate over how to further apply AML laws to digital assets and push regulators to finalize rules.

🔹 Australia plans to establish a framework for licensing and regulating crypto service providers in 2023. It aims to define which digital assets should be subject to financial services laws and what rules are appropriate to safeguard consumers.

🔹 A central bank digital currency is a legislative priority for the European Union in the coming two years. A digital euro proposal could come in the second quarter of 2023, a Commission spokesperson confirmed. Anti-money laundering provisions implicating the crypto sector are also on the priorities list.

🔹 G20 economic leaders aim to develop an agreement on policy for crypto assets to inform global regulation at a meeting with finance and central bank deputies in Bengaluru, India.

📣 Dec. 15

🔹 Magic Eden, Solana’s biggest NFT platform, has added Polygon NFT minting and trading support. The move comes after several changes to bolster the platform’s blockchain gaming functionality.

🔹 First Hong Kong bitcoin, ether ETFs lure nearly $75 million with trading set to begin Friday. While these funds have attracted significant investment, crypto-focused ETFs have come under renewed scrutiny of late. Last month, Cosmos Asset Management announced it was delisting three ETFs and revoking a request for a third.

🔹 QCP Capital has at least $97 million stuck on collapsed crypto exchange FTX. The Singapore-based crypto trading firm has been trying to sell its claim to distressed asset buyers, the sources said.

🔹 Donald Trump, the former president of the United States, announced a new NFT collection on his official Truth Social account. The digital trading cards are “only $99!” apiece according to the collection’s website.

🔹 OpenZeppelin has announced the launch of a security service for metaverse projects. The Sandbox has hired OpenZeppelin for comprehensive security analysis.

🔹 Asian crypto investment firm Amber Group has acquired Singapore crypto exchange Sparrow. This comes as the Temasek-backed firm implements significant layoffs and retreats from global hubs to survive the crypto winter.

🔹 Mithril says it deposited 200,000 BNB tokens, worth around $53 million, to Binance to list its MITH token in 2018. The project now wants a refund after Binance delisted the token.

🔹 Microsoft updated its service terms this month to prohibit crypto mining without written approval. A post shared with Azure users listed the update as one of many actions made to “secure the partner ecosystem,” referring to partner firms that work to sign up software clients to Azure's cloud services.

🔹 Crypto derivatives platform Paradigm cuts salaries by 15%. The OTC firm blamed the pay reduction on contagion stemming from the collapse of the crypto exchange FTX.

📣 Dec. 14

🔹 Solana’s top NFT marketplace Magic Eden will reward users with discounts and NFTs based on their activity on the platform.

🔹 MetaMask and PayPal join forces to offer crypto onramp to select users.

🔹 WisdomTree launches nine new blockchain-enabled funds.

🔹 Maple Finance released version 2.0 a week after a $36 million default on the platform.

🔹 Binance CEO CZ (Changpeng Zhao) warned colleagues that the proverbial “crypto winter” isn’t over, and the months ahead won’t be easy.

🔹 Atlas Trading founders targeted by SEC for alleged fraud via Twitter and Discord.

📣 Dec. 13

🔹 Ex-FTX CEO Sam Bankman-Fried Arrested in the Bahamas.

🔹 Binance has resumed processing withdrawal requests of the USD Coin (USDC) stablecoin.

🔹 Tether announced that it's assisting crypto exchange Binance with a “chain swap,” which involves converting 3 billion USDT to the Ethereum network from the Tron network.

🔹 Tether vows to remove secured loans amid rush to show solvency.

🔹 Do Kwon, the founder of Terra, is currently stranded in Serbia, and the South Korean Ministry of Justice is cooperating with the Serbian government in an investigation to see if there is a special facilitator within Serbia.

🔹 A new report from JPMorgan Chase & Co. concludes that the U.S. crypto market exhibits characteristics of “herd-like behavior.”

🔹 A federal judge ordered the Commodities Future Trading Commission (CFTC) to serve the decentralized trading platform bZeroX's founders Tom Bean and Kyle Kistner as part of an ongoing lawsuit against Ooki DAO.

🔹 MakerDAO is set to execute a bundle of eight governance actions for the protocol.

🔹 Cobo, MetaMask Institutional and Gnosis DAO teamed up to create “Evolution,” a Soulbound tokens (SBTs) project.

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

🔹 Privacy-focused web3 firm Aztec Network raised $100 million in Series B funding led by a16z. The firm will use the funds to build out its encryption architecture and double its team of 40 people.

🔹 Blockchain-free decentralization platform Nillion raises $20 million led by Distributed Global.

🔹 Crypto insurance firm Evertas raises $14 million in a Series A round led by Polychain Capital.

🔹 Digital collectibles company Forum3 raised $10 million in seed funding led by Decasonic.

🔹 Web3 game Dogami raised a $7 million seed extension with investment from XAnge and Bpifrance.

🔹 Web3 intellectual property protocol Spaceport has raised $3.6 million in a pre-seed round co-led by Arca, Decasonic and Crit Ventures.

🔹 NFT infrastructure protocol Decent has raised $3.5 million in seed funding led by Archetype and Y Combinator. It launched the Creator HQ last month, a no-code creation and management hub for artists to customize and build unique NFT projects and manage their revenue, splits, metadata, etc.

🔹 Developers of the recently launched augmented-reality NFT project Onlybots secured an additional $3 million investment in a funding round led by Polygon Studios. Similar to Dapper Labs’ long-running NFT project CryptoKitties, Onlybots is a collection of digital pets consumers are able to buy and sell to each other.

🔹 Crypto startup Outdefine has raised $2.5 million in a seed round co-led by Jump Crypto and TCG Crypto.

🔹 One-stop shop for NFT trading has raised $1.65 million in a seed round co-led by Infinity Ventures Crypto and Spartan Group.

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

🔹 Lending platform on Arbitrum — Lodestar Finance was exploited for about $6.5 million.

🔹 Polkadot Oracle OptionRoom was hacked and all assets in the deployer's wallet were stolen.