Amid mixed sentiment on exchanges, cryptocurrencies are losing today. Bitcoin has retreated below $28,000. The Bitcoin network now has nearly 450,000 transactions still outstanding, and sentiment among risky assets was also weighed down by last Friday's surprisingly strong NFP report, which increased the chance of possible further Fed hikes and more difficult-to-manage inflation in the US. Along with Bitcoin, smaller cryptocurrencies like Ethereum, Cardano and Polygon also lost ground.
- Market sentiment weakened as the world's largest exchange, Binance, froze BTC withdrawals for the second consecutive time citing technical problems;
- Coinbase (COIN.US) exchange is considering moving operations to the United Arab Emirates due to regulatory hurdles in the US;
- The exchange's CEO stressed that the cryptocurrency market needs more capital investment to grow. The UAE is once again mentioned as a potential hub;
- According to Bloomberg reports, the Prime Minister of Liechtenstein has stated that he is open to investing state reserves in BTC.
Currently, the cost of a BTC transaction is about $19 although information from exchange users indicates that a significant portion of the routing is even several times more expensive. The reason for the nearly 450,000 transactions waiting to be processed on the network is probably due to the emergence of so-called Ordinals, which enable the creation of NFTs on the BTC blockchain. Due to this fact, network fees have risen to new peaks. Source: Ycharts
Start investing today or test a free demo
Create account Try a demo Download mobile app Download mobile app
BTC addresses have recently taken a dive; both new and active addresses are approaching their annual average (365 DMA).
New addresses are now at their lowest levels since January 1, 2023, and active addresses are at 1-year lows. All this despite record volumes and transaction fees. This shows that the expansion of the BTC network is still in question. Source: Glassnode
Among the group of long-term (blue) and short-term investors (red), BTC exchanges are mainly sent by short-term holders (about 90% to 95% of all receipts). What is noteworthy at the moment, of course, is the increase in profits of short-term investors in 2023, which makes the willingness to realize them even higher now. On the other hand, however, due to the limited supply in the hands of STH investors - the supply is naturally limited.... Source: Glassnode
Isolating the share of profits of short-term investors (STH) from the total inflows to the exchanges, we see that since the beginning of January there have been two waves of profit realization by this group, peaking around the 60% level of the total. Within the current market, the second wave of profit realization by short-term holders coincides with the recent correction. Looking historically, a period of correction followed such heavy selling pressure in STH. Source: Glassnode
Sell-side levels
BITCOIN, H4 interval. The price has settled below the SMA200 and SMA100 signaling weakness, the first support level may be the 23.6 Fiboancci retracement, of the upward wave from the fall of 2022 - at $27,400. A deeper decline could herald a bearish reaction, toward the 38.2 Fibo retracement, at $25,000. In a situation of extremes, the $21,500 level appears to be the last bastion of the bulls - it coincides with the 61.8 Fibo retracement and the price level of November 2022, before the collapse of FTX. Source: xStation5
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
