Gainers

The Federal Reserve’s attempt to cool down the markets by suggesting that the first rate cuts might not happen in March doesn’t seem to have had the desired effect. Surprisingly, stock markets opened in the green, and certain alternative coins, including Oracles $LINK and $PYTH, are taking the lead.

It appears that the market isn’t easily fooled. Before the Federal Reserve’s January FOMC meeting, the crypto market was on a downward trend, maintaining a bearish bias during and after the meeting. However, now that there’s been time to digest Powell’s statement that interest rates may not be cut in March, a healthy dose of skepticism seems to have kicked in.

The Federal Reserve has historically used its influence to “talk down” the markets when it deems them too exuberant. Powell’s recent speech, although termed “dovish” by most, aimed to dispel the notion that interest rates would need an imminent cut. Powell likely considered that signaling a rate cut would mark the beginning of the ‘Fed pivot,’ injecting more liquidity into the markets.

Despite this, Thursday has seen the market opening in positive territory. This suggests that the market might not be entirely swayed by Powell’s remarks, and given the forward-looking nature of the market, there’s an anticipation of increased liquidity sooner rather than later.

While the crypto market is still in an early stage of becoming less bearish, there are noticeable changes. $BTC has defied expectations by not falling through its bullish trend line, consolidating securely above it, at least for now.

$LINK, maintaining its bullish momentum, has stood out among the first altcoins to turn green. Even when others were struggling, $LINK is up approximately 10%, breaking out of its previous trend.

$PYTH, a newer player in the crypto scene, operates on the Solana blockchain and serves more blockchains than its Ethereum competitor, $LINK. Despite its relative novelty, $PYTH has kept above its upward trend line and is approaching the resistance at $0.446. If it surpasses this barrier, there’s potential for a new all-time high at $0.558, signaling a bullish future for this oracle. We should mention also that Binance announced that they will list PYTH on its platform starting from the 02 February 2024.

After the options expiry, the cryptocurrency market experienced a much-needed recovery, witnessing a surge in market cap to $1.62 trillion. Favorable indicators, including a low put-call ratio, provided ideal conditions for traders to buy Bitcoin and Ethereum. This led to a rebound in BTC and ETH prices, sustaining positive sentiment on Saturday.

The Crypto Market Fear and Greed Index saw a notable increase from 49 (neutral) to 55 (neutral) today, indicating rapid changes in sentiment among market participants.

Factors contributing to the market’s upswing include the expiration of $5.8 billion in Bitcoin and Ethereum options, resulting in significant short liquidations. Technical indicators, liquidation events, and macro influences played a role in the market dynamics.

Over the past 24 hours, the crypto market witnessed liquidations exceeding $120 million, with nearly $90 million attributed to short positions. Notably, BTC short positions worth over $40 million were liquidated, leading to the liquidation of more than 40,000 traders. The largest single liquidation order on Binance’s ETHUSDT amounted to $2.53 million.

Apart from Bitcoin and Ethereum, several altcoins, including SOL, SUI, ORDI, TRB, MANTA, CFX, ALT, and XRP, experienced significant short liquidations in the last 24 hours. As a result, SUI recorded a 21% increase, MANTA rose by 15%, and CFX showed an 18% gain.

The surge in Bitcoin and Ethereum prices can be attributed to increased futures and options open interest following the expiry, with substantial buying activity observed in the U.S. crypto market. Traders turned bullish after the U.S. Federal Reserve’s preferred inflation metric, US PCE, cooled to 2.9%, below market expectations.

BTC futures open interest on CME surged by 9% to $17.97 billion in the last 24 hours, while Binance, Bybit, Coinbase, and Kraken also reported similar positive data. Total BTC futures open interest increased by over 3% in the last 24 hours.

ETH futures open interest experienced a modest increase of 0.60% to $7.87 billion in the past 24 hours. Notably, data suggests active bullish sentiment among U.S. traders.

In the broader economic context, the US 10-year Treasury (US10Y) slipped to 4.13% from six-week highs of 4.16%, and the US dollar index (DXY) approached 103.50 following key economic data. Recent macro data indicates the likelihood of the Federal Reserve maintaining the policy rate in the 5.25%-5.50% range in the upcoming FOMC interest rate decision on Jan 31.

BTC’s price recorded a 5% jump in the past 24 hours, currently trading at $41,717, with a low and high of $39,902 and $42,209, respectively. Trading volume increased by 40% in the last 24 hours, indicating heightened interest among traders.

ETH’s price stands at $2,265, reflecting a 3% increase in the last 24 hours, with a low and high of $2,196 and $2,282, respectively.

Smaller cryptocurrencies are taking center stage as bitcoin ($BTC) trades in a lackluster manner following the recent introduction of spot ETFs in the U.S.

Noteworthy performers include $CHZ , the native token of the Chiliz network used for purchasing Fan tokens on Socios.com, and $KLAY, the utility token of Layer 1 blockchain network Klaytn, backed by the Korean internet giant Kakao.

Over the past 24 hours, CHZ has surged by 10%, surpassing $0.11 for the first time since May of last year, while KLAY has seen a 14.7% rally to $0.228, as per CoinDesk data. In contrast, Bitcoin has been trading within a narrow range of $42,500 to $43,500.

Chiliz’s CEO, Alexandre Dreyfus, revealed on X that the company intends to pursue an ambitious merger and acquisition (M&A) strategy this year, aiming to create expansive ecosystems by combining existing tokens and networks.

Simultaneously, Klaytn and the Web3-focused Finschia Foundation have proposed a merger to establish an Asian Web3 powerhouse. Finschia serves as a public mainnet successor to the LINE blockchain.

“The proposed merger will unite South Korea and Japan’s leading blockchains to form an ecosystem boasting over 420 DApps. The new blockchain will inherit Klaytn and Finschia’s integration with Kakaotalk and LINE, amassing a user base of over 250 million across Asia,” stated Klaytn in a social media post on Tuesday.

Upon completion of the merger, holders of KLAY and Finschia’s FNSA token will be able to exchange their holdings for a new coin. Klaytn emphasized that the new coin will feature low inflation, a burning mechanism, and a zero reserve strategy.

As we near the end of 2023, the cryptocurrency realm is experiencing notable shifts. There’s been a surge in Bitcoin options trading volume, hitting record highs before the imminent month-end expiration. Despite a recent price increase, BTC took a dip below $43,000, in line with a broader market cooldown. Nonetheless, Bitcoin maintains lower volatility and a substantial market capitalization exceeding 8 billion.

The price drop in Bitcoin coincided with decreased activity among major holders, but there’s been a rise in total open interest, indicating an increase in long-term position holders. Amidst Bitcoin’s declining dominance and rising interest in alternative cryptocurrencies, Optimism (OP), Stellar (XLM), and Arbitrum (ARB) are gaining traction as investors diversify their portfolios.

Optimism (OP) has seen an impressive 69% surge in the past week, coinciding with its OP Mainnet surpassing $5 billion in Total Value Locked (TVL). This milestone highlights growing confidence in Optimism’s layer-2 solution within the Ethereum community.

According to IntoTheBlock data, 99% of OP holders are profitable at the current price, indicating strong bullish sentiment. However, concentration by large holders at 89% hints at potential volatility challenges.

The token’s price fluctuates between $3.22 and $3.70, with a significant 68% increase in trading volume. While indicators suggest a bullish trend, the Relative Strength Index (RSI) at 74.23 and the Stochastic oscillator at 84.38 hint at an overbought condition, possibly indicating an upcoming price correction.

Moving averages show a bullish trend, with short-term averages at $3.19 and $3.29, and longer-term indicators at $1.73 and $1.96, signaling a positive long-term outlook.

Optimism (OP) could reach $4.28 and potentially $4.99 if the upward trend continues, but caution is advised due to possible corrections. Support levels stand at $2.40 and $1.25, crucial for potential rebounds if a decline occurs.

Stellar (XLM) has gained attention with a 9% positive change, ranging between $0.1303 and $0.1355. Its $3.76 billion market cap places it 24th in the crypto market, with a 30% increase in trading volume.

Technical indicators for Stellar (XLM) show a neutral stance with a slightly bullish bias. A short-term target of $0.1475 and a potential resistance level at $0.1723 are possible if the current trend continues. Support levels are at $0.1227 and $0.1081.

Arbitrum (ARB) surged by 42.4% recently, trading between $1.49 and $1.67, marking an 80% increase from its yearly low. Its fast growth in developer headcount signifies a strong position in the Layer 2 solutions space.

Technical indicators for Arbitrum (ARB) suggest a neutral to bullish sentiment. Targets at $1.73 and possibly beyond $2 are in sight if the positive trend holds. Support levels are at $1.29 and $1.10.

In conclusion, 2023 ends with dynamic shifts in the crypto market. Bitcoin remains resilient, with diversification evident through Optimism (OP), Stellar (XLM), and Arbitrum (ARB). While Optimism’s TVL milestone demonstrates growing confidence, careful monitoring of support and resistance levels is essential for investors amidst evolving market conditions.