Decentral Block Post

After nearly a 20% rally last week, Bitcoin (BTC) is on track to end this week with gains of roughly 10%. Bitcoin’s rally has improved sentiment and attracted buying in several altcoins. This sent the total crypto market capitalization firmly above the $1 trillion mark.

The strong recovery in Bitcoin has startled several analysts who remain skeptical about the rally. Some believe that the current rise is a dead cat bounce that will reverse direction sharply, while others see similarities between the current rally and the 2018 bear market recovery.

Although traders should be ready for any eventuality, the pace of the rise in Bitcoin does point to a possible major bottom. There are likely to be bumps down the road but the dips are likely to be aggressively purchased by traders.

Bitcoin’s sustained recovery may encourage buying in select altcoins.

Let’s study the charts of Bitcoin and select altcoins that are showing strength in the near term.

The United States equities markets are on track to finish the week in the red but that has not resulted in a deeper loss for Bitcoin (BTC). The news of cryptocurrency lender Genesis filing for Chapter 11 bankruptcy also did not have any meaningful impact on Bitcoin’s price. This shows that the selling pressure could be reducing.

However, trading firm QCP Capital warned in the latest edition of its regular markets newsletter that the current recovery in Bitcoin was only a bear market relief rally. They anticipate this recovery to be followed by another bout of selling which could sink the price of Bitcoin and Ether (ETH) below their 2022 low. QCP used the Elliott Wave analysis to arrive at this conclusion.

After an extended bear phase, the price action always climbs a wall of worry during the initial days of a new bull market. At that time, several analysts remain in disbelief as they keep expecting the price to move lower but traders could catch a change in trend if they keep an eye on the formation of higher highs and higher lows.

Are Bitcoin and select altcoins showing signs of a bottom formation? Let’s study the charts of the top-10 cryptocurrencies to find out.

BTC/USDT

Bitcoin’s price has been trading in a tight range between $20,400 and $21,650 for the past few days. Usually, a tight consolidation near a stiff resistance is a positive sign as it shows that traders are not rushing to book profits.

Crypto lender Nexo Capital has agreed to pay $45 million in penalties to the United States Securities Exchange Commission (SEC) and The North American Securities Administrators Association (NASAA) for allegedly failing to register the offer and sale of its Earn Interest Product (EIP).

The news was announced by the SEC and NASAA in two separate statements on Jan. 19. According to a statement from the SEC, Nexo agreed to pay a $22.5 million penalty and cease its unregistered offer and sale of the EIP to U.S. investors.

The additional $22.5 million will be paid in fines to settle similar charges by state regulatory authorities, the report said.

NASAA in its Jan. 19 statement said that the settlement in principle comes after investigations into Nexo's alleged offer and sale of securities after the past year of investigations.

"During the investigation, it was discovered that EIP investors could passively earn interest on digital assets by loaning those assets to Nexo."

The total crypto market capitalization soared by 29.4% in two weeks, although Bitcoin's (BTC) price stabilized near $21,000 on Jan. 19.

As a result, it became increasingly difficult to justify that the 5-month-long bearish trend still prevails after the $930 billion total crypto channel top has been breached. Still, the psychological $1 trillion resistance remains strong.

The move possibly reflects investors becoming more optimistic about risk assets after weaker than expected inflation metrics signaled that United States Federal Reserve interest rate hikes strategy should ease throughout 2023.

However, Klaas Knot, who serves as the governor of the Dutch central bank, stated on Jan. 19 that the European Central Bank (ECB) "will not stop after a single 50 basis point hike, that's for sure."

At the Davos forum Knot added: "core inflation has not yet turned the corner in the Euro area."

Avalanche (AVAX) came into the spotlight early at the beginning of 2023 by adding its blockchain support to Amazon Web Services (AWS) cloud. However, empirical and on-chain analysis suggests that Avalanche’s price surge is likely due to a broader cryptocurrency market pump which will likely end with the rest of the market.

Is Avalanche’s Amazon news exaggerated?

While integration with the world’s largest blockchain service is a positive step for Avalanche, the hype around its implications might be exaggerated. The evidence lies in a similar move that Avalanche’s team made in December 2022.

Avalanche’s team established a deal with Alibaba’s Cloud toward the end of 2022. The Asia-based cloud service commands a 6% share of the sector globally. Nevertheless, the blockchain’s validator count has remained consistent, implying that not many users of Alibaba Cloud are willing to run an Avalanche node.

AWS earns revenue from users willing to use blockchain nodes, which is probably why it keeps adding support for various blockchains. Amazon has supported an Ethereum node since May 2021. The recent Amazon partnership announcement might mislead some investors.

Avalanche’s ecosystem development

Avalanche’s blockchain usage data is also not encouraging. The gas used on the blockchain subsided steeply after the May 2021 crypto market crash and it hasn’t recovered since. The total value locked in Avalanche’s DeFi ecosystem is near two-year lows of $885 million, ranking sixth in comparative liquidity of other chains.

Bitcoin (BTC) may gain another 50% before seeing a mass sell-off to complete its bear market, new research predicts.

In the latest edition of its regular markets newsletter, “The Crypto Circular,” trading firm QCP Capital delivered a grim warning to those who believe that crypto winter is over.

Research warns of "final Wave 5 selloff"

Bitcoin has surprised by retaining new support levels abruptly reclaimed in its week-long bull run, so far topping out at $21,650.

Despite widespread suspicion over the “choreographed” move, BTC/USD has nonetheless clawed back key trend lines and psychological price points.

For QCP, there is still plenty of fuel to send the pair higher, but that still does not mean that the bear market overall is done and dusted.

Ethereum (ETH) price is struggling to overcome resistance at $1,600 and this is the altcoin’s third attempt since September 2022. Some would say the 33% year-to-date rally could be interpreted as a failed opportunity to breach the $200 billion market capitalization mark. 

If Ethereum price were to break above $1,600, it would return Ether to a top-60 global tradable asset, surpassing giant multinational companies like Nike (NKE), Novartis (NVS), Cisco (CSCO) and Toyota (TM).

Unfortunately, at least for bullish traders, derivatives markets are not hinting that Ether will finally break the $1,600 resistance — at least, not until the U.S. Federal Reserve reverses its course of tightening the economy.

Bulls' frustrations can partially be explained by Silvergate Bank's $1 billion net loss in the latest quarter. The crypto-friendly bank laid off roughly 40% of its workforce on Jan. 5 and it now faces a class-action lawsuit over its FTX and Alameda Research dealings. The suit alleges that Silvergate aided and abetted FTX's fraudulent activities and the exchanges' breaches of fiduciary duty.

The negative newsflow continued on Jan. 17, as Japan's deputy director-general of the Financial Services Agency's Strategy Development and Management Bureau, Mamoru Yanase, argued that the crypto sector should face the same regulation as traditional banks and brokerages.

The United States producer price index (PPI) fell 0.5% for the month, which was much more than the 0.1% decline estimated by economists surveyed by Dow Jones. The largest monthly decline since April 2020 was also aided by a sharp drop in energy prices. 

Another report showed that the retail sales data dropped 1.1% in December, a tad bit more than the anticipated 1% decrease.

Although both data points show inflation is cooling off, the U.S. stock markets failed to hold on to their initial gains. Similarly, several cryptocurrencies sold off from their intraday highs, indicating that traders may have booked profits ahead of the Federal Reserve’s meeting on Feb. 1.

The strong crypto recovery in the past few days has seen traders return to the fore. Bitcoin’s (BTC) trading volume soared 114% over seven days. Strong volume accompanied by a sharp rise in prices usually indicates aggressive buying by the bulls. This increases the likelihood that Bitcoin’s November low at $15,476 may not be breached.

How far could Bitcoin and altcoins correct and what are the important support levels to keep an eye on? Let’s study the charts of the top-10 cryptocurrencies to find out.

Shiba Inu is hoping to become more than just a Dogecoin-inspired meme cryptocurrency as it comes closer to launching its layer-2 network called Shibarium. Meanwhile, the SHIB token has emerged as one of the best-performers so far in 2023.

SHIB price jumps 60% in 2023

SHIB's price has rallied nearly 60% year-to-date (YTD) to $0.00001294, its highest since early November 2022.

The gains started appearing mainly due to favorable macro conditions that prompted similar rallies elsewhere in the crypto market. Nonetheless, the Shiba Inu price rally picked up momentum as investors assessed its announcement of the upcoming beta release of Shibarium.

Shibarium is reportedly a layer-2 network that would run atop the Ethereum blockchain mainnet. In other words, it would enable developers to build and launch decentralized applications (dapps) while aiming for lower transactional costs and improved network scalability.

Shiba Inu price is now up 25% since Jan. 16 when the Shiba Inu team teased its audience with the Shibarium launch announcement.

Switzerland-based cryptocurrency firm 21Shares is betting on proof-of-stake (PoS) coins by launching a new crypto exchange-traded product (ETP) dedicated to staking.

21Shares on Jan. 18 launched the 21Shares Staking Basket Index ETP, a crypto staking index designed to track up to 10 PoS cryptocurrencies. The ETP immediately starts trading on the local stock exchange BX Swiss under the ticker STAKE.

At launch, 21Shares’ STAKE ETP tracks six digital assets, including Binance Coin (BNB), Cardano (ADA), Cosmos (ATOM), Polkadot (DOT), Solana (SOL) and Tezos (XTZ). The index will rebalance on a semi-annual basis in March and September in accordance with market shifts.

With addition of STAKE, 21Shares and its parent firm 21.co now provide a total of 47 crypto ETP products across 12 exchanges in nine countries. The ETPs aim to provide investors with a safe and secure way to gain exposure to crypto, offering an alternative to direct crypto investment.

“STAKE provides value for investors by using the ETP’s assets to generate a passive yield that may offer additional returns by contributing to the network’s security,” 21.co director of ETP Arthur Krause said in a statement to Cointelegraph.

The notion that bear markets are good for builders appears to be true with the total number of monthly active Web3 developers increasing 5.4% to more than 23,300 over the last 12 months despite a near 70% drop in crypto prices.

According to a Jan. 16 report from Electric Capital, “full-time” developers — categorized as those who contribute to 76% of Github commits — also increased 15.2% to over 7000, while “one-time” builders fell 6.2% to over 3,500 during the same time period between December 2021 and December 2022

Despite the crypto market capitalization beginning its long plunge from from its all-time high (ATH) of $2.9 trillion in Nov. 2021, monthly developer activity only began to fall in Jun. 2022 after the metric reached its record high of nearly 26,500.

This fall was partly attributed to the fall in developer activity in the Terra ecosystem following its catastrophic collapse in May. 2022.

The next three months from June to September saw a 26% fall in weekly active Web3 developers.

Despite a wave of heavy crypto layoffs to start the new year, employees in technical and engineering roles, as well as senior management, will likely continue to see “strong demand” for their skills, recruitment professionals believe.

It’s been a tough first few weeks of 2023 for crypto businesses and their staff. Within just two weeks, the market has already seen more than 1,600 crypto-related job cuts as a result of continued market volatility and uncertainty. 

However, not all departments have seen the same level of cuts. 

SAFU: Senior-level tech and engineering

Rob Paone, founder and CEO of crypto recruitment firm Proof of Talent, told Cointelegraph that technical and engineering roles are by a “wide margin” the most in-demand jobs, even during bear markets.

He said his firm is still seeing “strong demand” for these functions, adding that these salaries are still “very competitive” despite “bidding war type scenarios” no longer being the case for these employees.

Risk assets have started the new year on a strong note. The S&P 500 (SPX) and the Nasdaq closed in the positive for the second successive week and also notched their best weekly performance since November. 

Bitcoin (BTC) led the recovery in the crypto markets with a sharp 21% rally last week. That sent the Bitcoin Fear and Greed Index into the neutral territory of 52 on Jan. 15, its highest since April 5, 2022. However, the index has given back its gains and is again back into the Fear zone on Jan. 17.

The strong rally in Bitcoin has divided analysts' opinions. While some expect the rally to be a bull trap, others believe that the up-move could be the start of a new bull market. The confirmation of the same will happen during the next dip. If the cryptocurrencies form a higher low followed by a higher high, it will suggest that the downtrend could be over.

Could the S&P 500 extend its rally? What are the critical levels on BTC and the cryptocurrencies to watch out for? Let’s study the charts to find out.

SPX

The S&P 500 continued its recovery last week and has reached the downtrend line. The 20-day exponential moving average (3,904) has started to turn up and the relative strength index (RSI) is in the positive territory, indicating advantage to the buyers.