Daily News | Resilient Bitcoin and Investors' Interest Rate Reassessment Ahead of PCE Index Release
Crypto Daily Digest: Resilient BTC Begins to Show Selling Pressure Despite Scrutiny and Market Factors
Good morning, traders! Let’s seize this Wednesday relentlessly and make the most of it! 🚀
Investors are reassessing their positions on the Federal Reserve’s interest rate path as technology shares in the US took a dip. The Nasdaq 100 fell by 0.5%, while treasuries drifted lower. The decline follows a recent shift towards tech stocks and away from financials that is now starting to reverse.
However, Chinese technology shares are expected to see gains as Alibaba announced a major restructuring that will result in six business units and several initial public offerings. As a result, US-listed shares of Alibaba Group Holding rose 14.3%, while the Golden Dragon index of Chinese companies that trade in the US rose 3.5%.
Investors are preparing for a busy week of economic data, and the central bank’s preferred measure of inflation is expected to be a key factor in the Fed’s next rate decision (Thursday 12:30 UTC).
Meanwhile, Bitcoin (BTC) has only dropped 3% over the past week and is currently trading at around $27,300, despite increasing regulatory scrutiny and the recent CFTC lawsuit against Binance and its founder Changpeng Zhao. Investors are concerned about the potential impact of these events on the industry.
Other market factors affecting Bitcoin include the recent FOMC interest rate hike and MicroStrategy’s announcement of buying $150 million more in Bitcoin. The Exchange Stablecoins Ratio (ESR) has risen to its highest level since May 2021, indicating potential selling pressure as investors move fewer Stablecoins to exchanges and more Bitcoin, or they are doing both simultaneously. This suggests that investors may be positioning themselves to take profits quickly should an event cause a sudden drop in Bitcoin‘s price.
The Adjusted Spent Output Profit (aSOPR) ratio, which measures the extent to which Bitcoin investors are selling at a profit or loss, also indicates caution among investors as they sell at a profit during an increase in asset prices.
Finally, Ether (ETH) is up 3.5%, while Ripple’s XRP token has jumped over 7%.
Topic of the Day: Zero-Knowledge Rollup Competition Heats Up in Ethereum Eco
ConsenSys, an Ethereum software firm, has announced the release of a public testnet of its zero-knowledge Ethereum Virtual Machine (zkEVM) called “Linea.” This release marks the next evolution of ConsenSys’ zkEVM, which has already processed over 350,000 transactions since its private testnet launch in December. While the integration of Linea with ConsenSys’ popular MetaMask wallet and developer toolkit Truffle is a positive development, the release of multiple zero-knowledge rollups in the Ethereum eco could have both positive and negative implications.
Zero-knowledge (ZK) technology is widely viewed as an expansion for blockchains, as it can increase transaction speed and reduce fees. A zkEVM is a type of ZK rollup that is compatible with Ethereum Virtual Machine and can deploy smart contracts.
This compatibility means developers can migrate their applications to Ethereum without any issues, making it easier for developers to work with Ethereum.
However, with multiple zero-knowledge rollups being released in the Ethereum eco, it remains to be seen which rollup will become the dominant player in the market. The competition could lead to rapid innovation and new developments in the space, but it could also lead to confusion and fragmentation.
Ether (ETH) $1774.53 (+0.08%) - Neutral Outlook
Overview:
- Closest daily support zone: is 1735 - 1710
- Closest daily resistance zone: 1780 - 1840
- Key Level: 1800 (Weekly Close of Feb. 08 - 15, 2021)
When looking at the weekly timeframe for ETH, it’s currently trading within the weekly resistance channel. The RSI is showing great strength, but with decreasing volume, suggesting that bears may be gaining the upper hand in the current battle between bulls and bears. Zooming in on the three-day timeframe, bears have been trying to push ETH below the recent red candle, but the bulls have remained strong in the 3D demand zone [1735 - 1710].
However, the bulls haven’t been strong enough to push the price above the 3D supply zone [1780 - 1840]. As the price stays within the channel, the volumes have been decreasing on each consecutive candle, indicating that the bulls may be losing momentum. If ETH breaks below the supply zone, then it’s likely that volatility will focus around the daily golden zone [1595 - 1550], as suggested by the volume indicator.
Daily Resistance zones
- 1780 - 1840
- 1900 - 1945
- 2005 - 2030
Daily Support zones
- 1735 - 1710
- 1660 - 1610
- 1595 - 1550
