Short-Term Down, Long-Term UP!

GM, Anon! In the world of crypto, there's never a dull moment, yet recent weeks have seen a bit of a lull in price fluctuations, with the market holding steady within a certain range. Speculations are rife, with some market watchers bracing for a potential dip to new lows, while optimists argue that the worst may be behind us. Let's dive deeper!

State Of the Market

The Federal Reserve announced its decision to maintain interest rates at 5.5%. In their statement, the Fed mentioned, "The committee does not anticipate reducing the target range until it has a stronger belief that inflation is steadily progressing towards the 2 percent mark." 

• This unexpected decision led to a minor market downturn, as many had anticipated a rate cut. 

• However, the second interest rate decision scheduled for March indicates a 47% probability of a 25bps rate reduction. 

In other noteworthy developments, the Argentine government has eliminated taxes on crypto, potentially positioning Argentina as a burgeoning crypto-friendly destination. It will be intriguing to observe how the crypto landscape evolves in Argentina with a government that supports crypto initiatives. Simultaneously, the European Securities and Markets Authority (ESMA) has issued two consultation papers, marking a significant move in regulatory matters. 

Inflows & Outflows: Digital asset investment products experienced significant outflows on a global scale, amounting to $500M. 

• The United States, Switzerland, and Germany were the regions with the most substantial outflows, totaling $409M, $60M, and $32M, respectively. 

• Grayscale witnessed outflows of $2.2B last week, although these outflows appear to be tapering off gradually.

• Bitcoin experienced significant outflows of $479M, while short-bitcoin products received inflows totaling $10.6M. 

The decrease in stablecoin flows to exchanges over the last week suggests reduced trading activity and potential caution among investors. This trend might also indicate decreased demand for crypto in the short term.

Two months after the settlement of certain regulatory concerns, Binance is showing signs of recovery in terms of market share. 

• During this period, trading volumes on Binance have experienced a notable resurgence, climbing to 49%. 

• This represents a significant increase from the multi-year lows the exchange had previously encountered.

• The recovery in market share and trading volumes indicates renewed confidence and participation from traders and investors on the platform. 

• It suggests that users who may have temporarily shifted their activities elsewhere due to regulatory uncertainties are now returning to Binance.

The noticeable outflows of ETH from exchanges over the past few weeks can indicate several potential scenarios and trends within the crypto market:

• This could be an indicator of long-term confidence in the asset, as users often withdraw their holdings from exchanges when they don't intend to trade them actively.

• Outflows from exchanges could also be related to the growing use of Ethereum in DeFi protocols.

• Many investors might be accumulating ETH for long-term holding or staking purposes. If a significant portion of withdrawn ETH is being staked or held off-exchange, it could reduce the circulating supply available for trading, potentially affecting price dynamics.

In the latest developments on the spot Bitcoin ETF front, there's been a significant shift with $14.8M in daily net inflows, marking the first net inflow since January 19th. This signals renewed interest in spot Bitcoin ETFs. 

• Additionally, Bitcoin futures premiums on CME are rising, reflecting a shift to contango. 

• In a competitive move, Invesco and Galaxy have slashed their Bitcoin ETF fee from 0.39% to 0.25%, challenging market leaders.

• Meanwhile, new spot Bitcoin ETFs have managed to accumulate 150,000 BTC, while the market share of GBTC has fallen to 36%, indicating a shift in investor preferences towards these ETFs. 

• The approval of a spot Ethereum ETF is anticipated, with the potential for it to materialize in May, although according to analyst TD Cowen's speculations suggest a much later timeline. 

Bitcoin Daily

Trendline Reclamation: BTC is currently in the process of attempting to reclaim a trendline that was broken around three months ago. This is a significant technical development as it indicates the potential for a reversal in the recent price trajectory.

Target at 48k: If BTC successfully reclaims this trendline, it is likely to make another attempt at the $36K level. However, it's important for traders to exercise caution, as such price levels can sometimes lead to fakeouts. This means that the price could briefly breach 48k before reversing, so careful monitoring is advised.

Downside Potential: Despite the short-term possibilities, some analysts believe that Bitcoin still has room for downside exploration. This perspective is based on previous market cycles and suggests that the current price may not have reached its lowest point yet.

Correction Targets: In the event of a downward correction, analysts have identified specific targets:

• T1: 36k (0.382 Fibonacci Level): This level represents a common retracement level in technical analysis. If BTC experiences a correction, it may find support around $36K.

• T2: 33.5k: Another potential support level lies at 33,500 USD, and this could be a point where the price stabilizes during a downward move.

• T3: 31.8k (Previous Market Structure): This target is significant because it aligns with the structure of the market in the past. Traders often look to historical levels as potential areas of support or resistance.

In summary, the daily analysis of BTC suggests that while there's a possibility of a short-term rally if the trendline is reclaimed, there is also a belief among analysts that further downside movement could occur based on historical patterns. Traders should remain vigilant and consider these correction targets when making decisions in the current market environment.

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Blue Chip and Majors Overview

Jupiter

Jupiter Exchange, a prominent Solana-based decentralized exchange, recently executed one of the largest token airdrops in history, distributing approximately $700M worth of its JUP token to nearly a million wallets. The airdrop, which took place without major issues on the Solana blockchain, saw the JUP token price soar from an initial $0.41 to $0.72, achieving a fully diluted market cap of over $6B. However, the price has since dropped to $0.60.

• Magic (MAGIC) - MAGIC is the utility token that connects gaming communities in the Treasure Metaverse. The Treasure Metaverse is a decentralized NFT ecosystem on Arbitrum, a Layer-2 scaling solution for Ethereum. According to crypto analyst World of Charts, Altcoins ranked between 150 and 300 in market value and have considerable potential for growth, at the forefront is MAGIC, which is on the verge of a breakout. MAGIC had dropped to $0.41 on the 19th of October but has since recovered, rising to $1.21. World of Charts predicts a potential increase of 65%, which would see MAGIC cross $2. 

• Dymension (DYM) - Multilayer rollup deployer Dymension is in the midst of launching its mainnet and is gearing up to airdrop 70M DYM tokens. The airdrop will be worth a staggering $210M at current prices. Currently, DYM is trading around the $4.6 mark. 

• Dogwifhat (DIF) - Dogwifhat (DIF) had been on an absolute tear in recent weeks, reaching its all-time high just two weeks ago. However, since then, its price has fallen by over 50%. Currently, the token is trading at $0.22, down 17% in the past 24 hours. 

• Pepe (PEPE) - Another memecoin in the doldrums is Pepe. The PEPE token’s price has been on a steady downward trajectory, dropping over 35% in the last 30 days. 

• Sui (SUI) - Sui recently broke into the top ten DeFi blockchains less than a year after its inception, with its TVL surging by over 1000% in four months. The SUI token has been on a similar trajectory and has registered an increase of nearly 8% over the past week. Currently, SUI is trading at around $1.44, having registered a drop over the past 24 hours. 

• Metis (METIS) - The METIS token has seen an impressive surge in January, registering an increase of 173%, as its network continues to grow. This impressive surge can be attributed to MetisDAO launching the ecosystem development fund and increasing confidence in MetisDAO’s potential following its integration with the BitGet wallet.

• LCX (LCX) - LCX has registered impressive gains over the past month, rising by over 180%. The price has seen a fair amount of volatility over the past 24 hours but, nonetheless, is on an upward trajectory. 

• Maker (MKR) - Maker (MKR) has been relatively bullish over the past month, registering an increase of 19%. Analysts expect that MKR could see a further price increase due to its trading volume being on the rise, resulting in short-term gains for holders. 

• Ondo (ONDO) - Investors are rushing to purchase the ONDO token, which was launched on the 18th of January. Such has been the hype around the token that it topped $1B in its first week. Currently, the token is trading at $0.206, down by over 9% during the past 24 hours. 

• Canto (CANTO) - Canto is an EVM-compatible layer-1 blockchain and part of the Cosmos ecosystem of interoperable chains and decentralized applications (dApps). Exactly a year ago, the CANTO token hit its all-time high. However, since then, the price has registered a gradual decline and is currently trading at $0.22

• Celestia (TIA) - Celestia’s (TIA) price volatility continues, with the token currently trading at $16.70. TIA had hit its all-time high on the 15th of January before plummeting to $14.12 on the 23rd. The price made a strong recovery, rising to $18.44 on the 30th of January before dropping to its current level. 

• Sei (SEI) - The SEI token entered 2024 on an extremely bullish note, surging to its all-time high on the 3rd of January. However, things have taken a turn since, with SEI slipping into the red. The token has shed 16% over the past month and is currently trading at $0.62, nearly 30% down from its all-time high. 

• Bittensor (TAO) - TAO has registered an incredible increase of 61% over the past 30 days. In fact, TAO has been on an absolute tear, going from $340 on the 29th of January to its all-time high of $479 on the 31st of January. The reason behind TAO’s unprecedented increase is Ethereum’s Vitalik Buterin seemingly endorsing the token. Buterin mentioned the token in an article that talked about the challenges and promises of integrating artificial intelligence and blockchain technology. 

• Velodrome Finance (VELO) - Velodrome Finance was recently added to Coinbase’s listing roadmap. The addition positively impacted the price, with the token going past $0.060 for a brief time. However, the price has since dropped, with the token trading at $0.053. 

• Ronin (RON) - Ronin’s end to 2023 and beginning of 2024 has been nothing short of impressive. At the end of October 2023, RON was trading at $0.49. However, since then, RON has gone on a bull run that has seen it surge into 2024. By the end of December 2023, it had gone past the $2 mark, ending the year on a high. RON continued its bullish momentum in 2024 and is currently trading at $2.80 and could very well cross the $3 mark again. 

Smart Money Movements

• Smart Money has interacted the most with $INS and $EMERALD recently.

• $INS is an omnichain marketplace for inscriptions which has launched recently; they had two airdrop phases in the last few weeks and handled around 20M transactions in that period.

• $EMERALD is a new test project which introduced fungible NFTs, a pretty weird concept :) because what's the point of NFTs (Non-Fungible Tokens) then?! It has caught a good amount of attention.

• Smart Money is detected in $Trestle's LBP as well. It's a Celestia <=> ETH bridge that has plans to become a launchpad on Celestia as well. They will create a DEX on Celestia, so the launchpad could function smoothly. It has a pretty interesting concept because there are no smart contracts on Celestia, so creating a DEX on it will have a similar structure to OrdiSwap functions on Bitcoin, which doesn't have smart contracts too.

Yield-Farms

• Cleopatra is still favored by the smart yield farmers on Mantle. Check out the CL mETH + WETH pool ;)

• Ramses on Arbitrum has gained some traction from the Arbitrum smart farmers. The stablecoin maximalists are in the CL USDC/USDC.E pool and enjoying the 10-25% APR.

Mode Airdrop Opportunity 🪂  

• Smart Money has recently started depositing some funds into MODE Network, which is a new L2 and launched the mainnet. TVL has been growing at a rapid rate.

• Part of the Optimism Superchain, and they're airdropping 5.5% of the supply if you've had activity on ETH mainnet; you're eligible for the airdrop!

• It is a combination of SEI airdrop and BLAST/MANATA's airdrop, where you just need to bridge some ETH in.

🪂 Currently invite-only, so use the link: ref.mode.network/zGaUwj 🪂

• For the next week, you get boosted rewards and 2x rewards for interacting with dApps in the ecosystem.

Always Do Your Own Research (DYOR), but crypto has a way of rewarding users who are early!

NOTE: Because it's built on Optimism, it'll take a week to withdraw.

• You can use Pheasant Network as an alternative to bridge in and out since the main bridge currently only supports Ethereum.