Crypto newsletter: Bitcoin holds above $30,000 after sharp sell-off

• Overall crypto market correction
• Blackrock will invest in Bitcoin
• CME Group to Launch Ether Futures on February 8

At the beginning of the week, bitcoin was in the consolidation phase, while altcoins showed some strength, highlighted by Ethereum reaching its new all-time high. However on Thursday the majority of crypto assets plunged from their weekly highs, postponing for now plans to continue the upward trend. Ethereum, for instance, plunged to $1,045  and bitcoin revisited $30,000 level. Today, major cryptocurrencies are trying to move higher and erase recent losses. The capitalization of all digital assets in circulation increased to 921 billion, while an average daily trading volume is registered at $188 billion. Bitcoin's market dominance increased to 64.3%.

BlackRock has joined the bitcoin business

Grayscale, the world’s largest cryptocurrency asset management firm, took advantage of the recent dip and bought 16,244 Bitcoin worth more than $600 million this week due to increasing institutional demand. The company now has more than 630,000 BTC worth nearly $23 billion. Meanwhile, BlackRock has authorized two of its funds to invest in bitcoin futures, according to filings with the SEC. Both funds are allowed to use only cash-settled bitcoin futures, among other assets. The move allows exposure to cryptocurrencies for clients of the world's largest asset manager for the first time.

However a report from BitMEX Research which was published on Wednesday weighed on market sentiment. Report suggested that a critical flaw called "double spend" had occurred in the Bitcoin blockchain. Double spend is when someone is able to spend the same bitcoin twice. It is a feared and dire scenario for the digital asset, and the blockchain was thought to have solved the issue when Satoshi Nakamoto published the Bitcoin white paper in 2009.

From a technical point of view, Bitcoin bounced off the $28,810 support level yesterday and currently the price is testing major resistance at $31,500 which coincides with 200 SMA ( red line). If buyers will manage to break above it, the upward move may be resumed.  Also RSI is rebounding from the oversold area which is also a bullish sign. Next potential target for bulls is located at $34,500 level. However if sellers manage to regain control, then another doward impulse could be launched. 

Bitcoin, H4 interval. Source: xStation5

On the other hand, Spent Output profit Ratio (SOPR), an on-chain metric by Glassnode, points out that the correction may continue. A SOPR value above one indicates that all holders of spent outputs are transacting at a profit. On the other hand, any other value means that they are at a loss at the time of transacting. Usually, investors sell when they are in profit. Currently, the SOPR is drifting towards one, which means less BTC is being transacted on-chain at extreme profits.

Bitcoin SOPR chart. Source: Glassnode

CME will launch Ethereum  futures on February 8th

Ethereum hit a new all-time high at $1,438 on Tuesday, just two weeks before the Chicago Mercantile Exchange (CME) launches Ethereum futures. The derivatives have been "developed by the leading, most diverse, and regulated marketplace" and home to the renowned Bitcoin futures and options.

In the meantime, Ethereum has retreated from the newly established all-time high and price tested support at $1046.00. Today bulls are trying to push the price higher. Ethereum must break above the resistance at $1250, which is additionally strengthened by 50 SMA (green line), to pave the way for further gains.