First Mover Asia: Crypto Prices Rise With Investors' Appetite for Risk

Good morning. Here’s what’s happening:

Market moves: Bitcoin opened February higher; China’s crypto community remains active after all.

Technician's take: Sideways trading between $35K-$40K BTC could persist this week as long-term momentum fades.

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

Prices

Bitcoin (BTC): $38,818 +0.9%

Ether (ETH): $2,800 +4.3%

Top Gainers

Asset Ticker Returns Sector Solana SOL +13.5% Smart Contract Platform Filecoin FIL +11.5% Computing Polkadot DOT +10.4% Smart Contract Platform

Top Losers

"There are no losers in CoinDesk 20 today."

Markets

S&P 500: 4,546 +0.6%

DJIA: 35,405 +0.7%

Nasdaq: 13,346 +0.7%

Gold: $1,801 +0.2%

Market moves

Bitcoin started February, a seasonally strong month for speculative assets, in green, as investors seemed ready to increase their exposure to risk assets.

At the time of publication, the oldest cryptocurrency was trading at a little below $39,000, up about 1% over the past 24 hours, according to CoinDesk data. Ether, the second-biggest cryptocurrency by market capitalization, was up to $2,800, a more than 4% gain over the same time period.

According to Danny Chong, co-founder of Binance Smart Chain-based yield-enhancing asset tracker Tranchess, new investors, whether retail or institutional, may have entered the crypto market amid the lower prices in recent weeks.

“Compared to the traditional financial market, the crypto market is significantly smaller in market [capitalizations], enabling modest changes to create a more noticeable impact,” Chong said via a representative. “With rapid support at current levels as well as added liquidity from new and current users, a market rebound can happen relatively quickly as market sentiments turn positive."

Data compiled by CoinDesk shows that bitcoin’s trading volume across major centralized exchanges on Tuesday was slightly lower than a day ago. As mentioned in previous First Mover Asia columns, major Asian markets are expecting a slowdown this week because many traders and investors are taking time off for the Chinese New Year/Lunar New Year celebrations.

While crypto trading and mining are banned in China, a well-known actor in China mentioned a random token during China’s Spring Festival Gala – reportedly the world’s most watched television program – and the token’s price rose by as much as 10 times within hours. Its price since then has dropped significantly.

The occurrence shows that despite many crypto observers believing China's market is dead, especially after exchanges such as Huobi removed mainland China users, many people in China are still active in the crypto community.

Technician's take

Bitcoin Rangebound Near Support; Resistance at $40K-$43K

Bitcoin (BTC) is holding support above $37,000, albeit within a narrow trading range.

The cryptocurrency is up slightly over the past 24 hours, up 3% over the past week.

Buyers will need to make a decisive move above the $40,000 resistance level in order to pause the intermediate-term downtrend from November.

For now, the relative strength index (RSI) on the four-hour chart is approaching overbought territory, which typically precedes a brief pullback in price. Additionally, the downward sloping 100-period moving average on the four-hour chart could limit price gains over the short term.

On the daily chart, however, the RSI continues to rise from oversold levels, which means buyers could remain active above the $35,000-$37,000 support zone. The wide range of support suggests sideways trading could persist this week, especially given weak momentum on longer-term charts.

Important events

9 a.m. HKT/SGT (1 a.m. UTC): OPEC meeting

10 a.m. HKT/SGT (2 a.m. UTC): Eurostate consumer price index (Jan. YoY preliminary)

10 p.m. HKT/SGT (2 p.m. UTC): Australia industry group performance of construction index (Dec.)

10 p.m. HKT/SGT (2 p.m. UTC): Commonwealth Bank of Australia bank services PMI (Jan.)

11:50 p.m. HKT/SGT (3 p.m. UTC) Japan foreign investment in Japan stocks (Jan. 28)

CoinDesk TV

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

India Edges Toward Crypto Rule With 30% Tax and Announces Digital Rupee Launch, SEC Approves New US Exchange BSTX to Incorporate Blockchain Technology

CoinDesk regulatory reporter in India Amitoj Singh joined "First Mover" hosts to discuss Indian government's plan to place a 30% tax on crypto transactions and the announcement of the timeline for digital rupee. Ian Lee, co-founder of Syndicate, shared his views on the state of DAOs. Will Peck, head of digital assets at WisdomTree shared details behind the launch of the latest digital wallet WisdomTree Prime.

Headlines

Jack Dorsey Touts Bitcoin's Virtues at MicroStrategy Conference: The Block CEO and Twitter co-founder cites the crypto's transparent fees.

Tom Brady Retires to Focus on Family, NFT Startup: The legendary quarterback retires after a 22-year career in the NFL, with seven Super Bowl rings and a startup, Autograph, that just raised $170 million.

Hackers Move $3.55B Worth of Bitcoin From 2016 Bitfinex Hack:Bad actors will have a tough time cashing out the stolen bitcoin because most of the coins are blacklisted.

India Edges Toward Crypto Legalization With 30% Tax, Announces Digital Rupee:Finance Minister Nirmala Sitharaman noted the moves during the country's annual budget speech to Parliament.

Address Linked to Wonderland's Sifu Cashes Out $5.5M Worth of Ether: Sifu is an alleged serial scammer who has previously been convicted.

Diem Confirms Shutdown as Silvergate Acquires the Project's Assets:Facebook (now Meta) is officially winding down the stablecoin project it announced in June 2019.

Longer reads

NFTs, Celebrities and Perverse Deal-Making:As crypto company MoonPay continues its marketing push, it's unclear whether celebrity enthusiasm for NFTs is real.

Today's crypto explainer: Minting Your First NFT: A Beginner’s Guide to Creating an NFT

Other voices: Three key cryptocurrency trends family offices should be aware of(EY)

Said and heard

“As I talk to participants in the economy, what I hear is they actually want us to do something now about inflation. They’d like us to get back to at least a normal interest-rate posture and not be simulating more demand on top of normal levels,” he said. “So, I don’t hear much resistance to that.” (Richmond Federal Reserve President Thomas Barkin on CNBC) ... "The cathartic feeling of knowing something before it becomes cool or mainstream, regardless of how annoying it can be, is in fact valuable to some degree. Whether we like it or not." (Wachsman Marketing Associate Aziz Alangari for CoinDesk) ... "A lot of you wrote in last week to say that you have been a bit embarrassed about not understanding what cryptocurrency, NFTs and blockchain are exactly. That shame is not for regular people to carry. Speculative financial technologies like these derive a lot of their cultural power from being hard to define. Clear definition is usually a sign that an instrument is well regulated." ( New York Times columnist Tressie McMillan Cottom) ... "We're the closest we've ever been to having a native currency for the internet with bitcoin." (Twitter co-founder and former CEO Jack Dorsey at MicroStrategy Bitcoin for Corporations conference)