First Mover Asia: Bitcoin Nears $37K Amid Lighter Trading

Good morning. Here’s what’s happening:

Market moves: Bitcoin led a broader market stabilization with reduced spot trading volume.

Technician's take: A decisive break above $40K BTC is needed to pause the downtrend from November.

Catch the latest episodes of CoinDesk TV for insightful interviews with crypto industry leaders and analysis.

Prices

Bitcoin (BTC): $36,971 +1%

Ether (ETH): $2,460 +1.3%

Top gainers

Asset Ticker Returns Sector Dogecoin DOGE +2.6% Currency Polygon MATIC +1.0% Smart Contract Platform Polkadot DOT +0.8% Smart Contract Platform

Top losers

Asset Ticker Returns Sector Internet Computer ICP −5.2% Computing Cardano ADA −4.0% Smart Contract Platform Algorand ALGO −3.8% Smart Contract Platform

Sector classifications are provided via the Digital Asset Classification Standard (DACS), developed by CoinDesk Indices to provide a reliable, comprehensive, and standardized classification system for digital assets. The CoinDesk 20 is a ranking of the largest digital assets by volume on trusted exchanges.

Markets

S&P 500: 4,356 -1.2%

DJIA: 34,297 -0.1%

Nasdaq: 13,539 -2.2%

Gold: $1,848 +-0.2%

Market moves

Bitcoin led a broad stabilization in the crypto market Tuesday, as its spot trading volume came down dramatically from a day ago.

At the time of publication, the oldest cryptocurrency was changing hands near $37,000, up slightly over the past 24 hours, according to CoinDesk data. Ether, the second biggest cryptocurrency by market capitalization, was trading above $2,400, also up slightly over the same period.

Data compiled by CoinDesk shows that bitcoin’s spot trading volume across major crypto exchanges came down significantly on Tuesday, after a volatile trading day on Monday.

“We are starting to see flashes of [the] demand from players who recognize the longer-term value proposition of crypto,” Joel Kruger, currency strategist at LMAX Digital, told CoinDesk.

Norway-based blockchain data analytics firm Arcane Research noted in its weekly update on Tuesday that bitcoin’s price saw a “substantial recovery” with a volume spike on crypto exchange Coinbase during the late U.S. trading session on Monday, raising a question of whether MicroStrategy or some other unknown entities may have lifted the entire market by bidding up bitcoin’s price on Coinbase.

That said, the crypto market is closely observing the result of the U.S. Federal Reserve’s two-day policy meeting on Wednesday. The Fed on Wednesday is expected to hint at an interest rate hike in March to fight inflation.

Technician's take

Bitcoin Rose Above $37K; Resistance at $40K-$43K

Bitcoin buyers remained active, after pushing the cryptocurrency to over $37,000, which is near the top of a weeklong price range. Still, upside could be limited at the $40,000-$43,000 resistance zone over the short term.

The relative strength index (RSI) on the four-hour chart triggered an oversold signal on Saturday, which preceded the latest price bounce. On the daily chart, the RSI is starting to rise from extreme oversold levels, which could stabilize the current sell-off.

Initial resistance is at the 100-period moving average on the four-hour chart, positioned at $40,600. Buyers will need to make a decisive move above that level to pause the downtrend from November.

Important events

10 a.m. HKT/SGT (2 a.m. UTC): New Zealand credit card spending (Dec. YoY)

1 p.m. HKT/SGT (5 a.m. UTC): Japan coincident economic index (Nov.)

1 p.m. HKT/SGT (5 a.m. UTC): Japan leading economic index (Nov.)

9:30 p.m. HKT/SGT (1:30 p.m. UTC): U.S. goods trade balance (Dec. preliminary)

9:30 p.m. HKT/SGT (1:30 p.m. UTC): U.S. wholesale inventories (Dec. preliminary)

CoinDesk TV

In case you missed it, here is the most recent episode of "First Mover" on CoinDesk TV:

Bitcoin Bouncing Back After Falling Below $33K, Where Is It Headed Next? Privacy Coin Monero in Focus

"First Mover" hosts were joined by Peter Brandt, founder of Factor Trading, to analyze and predict the crypto market amid increased market volatility. Metaversal CEO Yossi Hasson and CoinFund Chief Investment Officer Alex Felix shared details behind the latest $50 million series A funding round for Metaversal and its expansion plan, as well as the outlook for the market amid the crypto crash. Plus, it's CoinDesk Privacy Week. Grid News tech reporter Benjamin Powers had a full report on privacy coin Monero.

Latest headlines

Crypto VC Firm Dragonfly Raising $500M for New Fund, Documents Show: The firm previously raised over $300 million across two funds.

Cathie Wood’s Ark Invest Predicts Bitcoin Could Exceed $1M by 2030: Wood previously predicted bitcoin would reach $500,000 by 2026.

BSN Introduces NFT Infrastructure Platform in China: The platform uses open permissioned chains to comply with Chinese regulations that discourage public blockchains.

Bitcoin's Correction Continues for Now, but Eventually It Could Go 'Parabolic,' Says Peter Brandt: Selling pressure is not over yet, although a confirmed shakeout could give way to new highs, according to the chartist.

IMF Urges El Salvador to Discontinue Bitcoin’s Legal Tender Status:The global financial institution said BTC's use as legal tender poses risks to the country's financial stability, integrity and consumer protection.

Longer reads

The Trojan Horse of Privacy: For privacy to take off, it needs to stop being the value proposition. It's got to be a gift people don't notice. Think apps first, privacy second, futurist Dan Jeffries writes for CoinDesk's Privacy Week.

Today's crypto explainer: Top 6 Crypto Passive Income Generators for 2022

Other voices: National Security Implications of Virtual Currency(Rand)

Said and heard

"For my part, the discussion over Thanksgiving leftovers brought home a data point about women’s and people of color’s interest in cryptocurrency. A 2021 survey found that the people who trade crypto are a far cry from the young, white, male image of a techbro." (Tressie McMillan Cottom in The New York Times) ... "There is likely a middle ground, a sound opinion to hold. I’m not an investment wiz, I’m a reporter who covers fake internet money, but I can say the only appropriate way to invest in crypto is to invest with conviction." (CoinDesk columnist Daniel Kuhn) ... “My fear is we are going to go lower. It is “going to be a big week.” (Penn Mutual Asset Management Portfolio Manager Zhiwei Ren on stocks to The Wall Street Journal)