Crypto news: Bitcoin opens week below 23 000 USD 📉 Bears are coming?

Risky assets opened the week in a weaker mood, which is weighing on cryptocurrency market sentiments. After last week's strong report from the U.S. labor market, investors are looking ahead to tomorrow Powell's speech (17:40 GMT). Powerful job growth in January and lower unemployment may indicate that the Federal Reserve will keep interest rates high for longer than Wall Street would like with a further decline in inflation not a foregone conclusion after all. Geopolitical issues are also weighing on risk. Scandal with a Chinese spy balloon in U.S. airspace and news of a closed-door U.S. briefing on China on February 15, as well as Russia's impending offensive in Ukraine, may herald that February will not be as kind to cryptocurrencies as January, weighing on global risk sentiment.

• Bitcoin, along with indexes, fell below $23,000. Altcoins are losing, including Metaverse-related projects Decentraland and Sandbox;
• After comments by a former member of the People's Bank of China, speculation about a potential lifting of China's cryptocurrency ban continues unabated;
• Institutions remain mostly bullish on the long-term future of cryptocurrencies. Low venture investments, however, illustrate that a positive breakthrough will be hard to come in the short term.

NDAM survey and Venture Capital collapse

An institutional survey commissioned by the Nickel Digital Asset Managemet fund was conducted by Pureprofile agency in January. It involved 200 investment funds from around the world, managing a total of nearly $3 trillion. Here are its results:

• 90% of the institutions in the survey indicated that Bitcoin is likely to rise this year. 65% believe that Bitcoin will beat $100,000 in the long term. 39% of the surveyed institutions expect the $69,000 peak from the previous bull market to be overcome within 3 years. 56% considered it more likely that Bitcoin will again ATH in at least 5 years. However, 'only' 23% of respondents believe Bitcoin will surpass $30,000 in 2023;
• The survey potentially shows that cryptocurrencies, despite the internal problems of 2022, can successfully become the beneficiary of increased risk appetite again.

Investment from VCs (venture capital) has already fallen in 2022, with rising interest rates meaning higher debt financing costs and the cryptocurrency market in a slump. The chart below shows this decline (Source: Pitchbook, Coindesk)

CoinDesk data shows that venture institutions in 2023 are still far from increasing spending on cryptocurrency market investments, despite Bitcoin's 40% rally in January. On average, investments are down 91% year-on-year. 

According to Coindesk, Venture Capital funds driving the industry's growth raised about $548 million in January 2023. This compares to more than $6 billion in January 2022. Web3 funding fell by more than 90%, decentralized finance (DeFi) also took a massive hit. The centralized finance (CeFi) market saw the biggest drop of over 99%, from $3.37 billion to just $23 million. This shows the continuing uncertainty and lack of confidence in the industry following the collapse of FTX. On the positive side, there was a smaller drop in infrastructure spending, which could mean for organic growth in technology and startups. Source: Coindesk

Bitcoin chart, H1 interval. A test of the 23.6 Fibonacci retracement of the upward wave that began in November 2022, near $22,000 seems to be possible. The SMA100 and SMA200 averages are wrapping down again, creating the risk of forming another 'death cross' if the 100-hour average (black color) will dynamically cross the 200-hour average (red color). The BTC price has fallen below the range in which it has traded since mid-January. The key for the bulls could be a possible re-entry above $23,500 which could potentially open the way for a rise to the vicinity of $25,000. Source: xStation5