The cryptocurrency market is starting the beginning of the year in a better mood, Bitcoin has defended the $16,500 level. However, given the fact that US indices and the UK stock market are closed today, the rebound may prove to be short-lived and much will depend on the atmosphere on Wall Street in the following days. Bitcoin's volatility, as well as that of the other major cryptocurrencies, fell mightily in the last two weeks of December. 'The king of cryptocurrencies' is back around $16,750 today, Solana is gaining nearly 11% and is trading near $11, Vitalik Buterin's comment has stopped the bearish trend.
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- Australia has displaced El Salvador in terms of installed ATMs, the current number of them is 219 against El Salvador's 212, the country ranked 4th in the world in this respect. The place on the podium just above Australia is occupied by Spain, with 225 cryptomats, however, in this country the installation of more does not proceed at a pace comparable to 'Aussie'. The total number of installed bitomats in the world, cited by some as one of the signals of growing adoption, is 36,602 of which 6071 were installed in 2022;
- In Nigeria, due to growing interest in cryptocurrencies and the CBC e-Naira, the government's experimental digital currency, the central bank has imposed a withdrawal limit of $225 per week from ATM machines;
- Brazil's 2022 regulatory framework for the cryptocurrency market. A record number of companies, more than 12,000, have reported cryptocurrencies on their balance sheets to tax authorities;
- According to CertiK data, cryptocurrency hacking activity in December 2022 fell to annual lows, stealing a total of BTC worth just under poand $62 million;
- Former CEO of PayPal (PYPL.US), later hired as a cryptocurrency specialist at Meta Platforms (META.US), David Marcus now runs a startup that processes payments in BTC however, he estimates that the cryptocurrency boom will continue well into 2023 or even 2024, with the end still not visible on the horizon;
- Concerns around the next cycle were also expressed by Coinbase CEO Brian Armstrong who indicated that it will take more time to improve sentiment towards the market, which attracted record attention from fraudsters and fraudulent entities in the previous bull market;
- With Bitcoin's record correlation with the S&P 500 in 2022, some analysts expect that institutions shying away from risk in the face of possible deeper declines in the index will be forced to remove their exposure to the cryptocurrency market altogether, which could trigger another cascading sell-off even if the domino effect of Luna and FTX ends. The vast majority of funds investing in the cryptocurrency market come from the US.
Map of cryptocurrency market highlights in 2022, showing how market capitalization has declined from $2.5 trillion in the fall of 2021 to just $800 billion today. Source: CoinGecko
Looking at the loss/gain ratio of the last and previous bull markets, we see a similarity between the two cycles. As in 2018, investors have so far realized losses amounting to nearly 50% of the gains made in the bull market. In the 2020-2022 period, we see that losses as well as gains have roughly quadrupled from 2017-2019 time. In 2021-2022, investors' realized losses amounted to more than $213 billion compared to $56 billion in 2018-2019, which is indirectly due to the higher market capitalization and the record amount of capital that flowed into the cryptocurrency market in 2020. In the 2018-2019 slump, the market began to turn around, when investors' realized losses amounted to 47.9% vs. Source: Glassnode
Bitcoin's volatility is again falling to record levels which historically has heralded a sharp jump in volatility. It may be favored by the atmosphere of the markets opening the new year as investors and institutions take new positions. The 7-day moving average has approached levels between 22 and 28%. If we look at its relationship with the price presented above we can see that falls to this area resulted in a large movement - a reversal or continuation of the trend. Source: Glassnode
Futures volumes for the two largest cryptocurrencies, i.e. Bitcoin and Ethereum, reached new lows, which illustrates the decline in sentiment towards the market and the decrease in interest in speculating on digital assets. Source: Glassnode
The amount of BTC held by statistically reluctant long-term investors reached historic peaks again, confirming the growing interest of investors with a longer investment horizon and possibly foreshadowing a possible supply shock if Bitcoin heads towards $20,000 in Q1 2023. Source: Glassnode
Chart of Solana and Bitcoin (yellow line), M30 interval. The information provided by Vitalik Buterin on Twitter helped Solana recover some of its losses, the cryptocurrency is gaining nearly 12% today as investors are also encouraged by Bitcoin's positive rebound, which is again heading towards $17,000. Source: xStation5
