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- Crypto Saving Expert Newsletter - Issue 105
Crypto Saving Expert Newsletter - Issue 105
Good afternoon! Bitcoin experienced a significant drop on Monday after the Nikkei 225 index had its worst day ever, plummeting by 13%. Let's dive in for a closer look at what is going on behind the scenes with bitcoin and the overall Web3 market. 👇
This week's issue will feature technical analysis of bitcoin, Ethereum, Solana, as well as important dates and key news stories:
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Bitcoin Tumbles Amid Choppy Waters
Bitcoin took a heavy nose dive on Monday following the Nikkei 225 index suffering its worst day in its history, plunging by 13%.
Bitcoin Outlook
Bitcoin faced a tough drop on Monday following the movement in Asia. However, the fierce move provided some potentially healthy retraces across the whole market.
Bitcoin tagged the peak of the ETF launch candle perfectly, with it bouncing perfectly from that point. The price also came into the highly anticipated $50,000 range, which many pointed out as a possible place for a pullback to align with.
Thus far, the reaction to the drop has been strong, and bitcoin has erased some of the losses. Still, bitcoin must regain $60,000 to provide a bullish outlook and the route to higher prices.
What Is Stonksy Saying?
Stonksy performed impressively when it came to judging bitcoin’s momentum.
The indicator flicked bearish on the 4-hour chart when the price was at $68,000. It then dropped to the downside as bitcoin began to fall.
Stonksy then remained within its -1 zone while the carnage unfolded, not signalling any signs of potential strength.
Following bitcoin’s initial bounce, Stonksy is now beginning to trend to the upside again, which could suggest the momentum could continue.
Ethereum
Ethereum faced one of the harshest drops out of the major cryptocurrencies. This comes after sustained weakness from ETH in the market.
However, the price came into a key zone and bounced convincingly.
Ethereum’s task is to regain the multi-month-long support level, which acted as a line in the sand for selling pressure.
If it can reclaim this level, it could build momentum towards the highs. Still, a period of consolidation on Ethereum, bitcoin and other cryptos cannot be ruled out.
Solana
Solana’s demand zone held strongly once again after it was tested for the sixth time.
This zone has proven to be a place where buyers step into the market and scoop up SOL. This has rewarded traders buying into this fear as SOL has provided a string of bounces each time after tagging this level.
Overall, Solana is trading within one big range between $190 and $120, moving between support and resistance consistently.
If Solana can break through resistance on its next attempt, it could surge towards its all-time high.
Fear & Greed Index
The Fear and Greed Index scores 17 and resides within the Extreme Fear segment. The Index plunged upon the downfall of the market on Monday as a blanket of uncertainty was cast over crypto and traditional markets.
The Index represents the panic caused by the immense drop in bitcoin and other cryptocurrencies.
However, if bitcoin’s low is in, the Index could be shifted back into higher segments upon a sustained rally or if bitcoin regains $60,000.
Losers
Alongside the wider crypto market, crypto-related stocks have also suffered a selloff amid economic concerns. How will this change as the US stock market opens?
Crypto-related stocks experienced a significant decline early on Monday in the run-up to the US open due to escalating tensions in the Middle East and growing concerns about the global economy's strength. Tensions that also caused bitcoin and Ethereum to tumble to their lowest levels in months.
In the U.S. pre-market trading, Coinbase (COIN) fell over 9%. Michael Saylor’s MicroStrategy, a software firm known for its adherence to its bitcoin strategy, lost 13%. CoinShares, a crypto asset manager based in Sweden, fell by 7.5%.
The decline in cryptocurrencies followed disappointing economic data from the U.S.
The US Labor Department reported jobs figures that missed expectations and a higher-than-anticipated unemployment rate, all while adjusting the previously reported data, hinting that the job situation in the US may be worse than first feared.
Tensions in the Middle East have also intensified as Iran threatened to attack Israel following the assassination of Ismail Haniyeh, the political leader of Hamas, in Tehran. Haniyeh was designated a terrorist by the US in 2018. The increasing tensions have further escalated over the course of the day, with Hezbollah launching a drone attack on Northern Israel.
Bitcoin, the largest cryptocurrency by market cap, plunged as much as 15% on Monday, briefly falling below $50,000 for the first time since February. Ether, the second-largest cryptocurrency, dropped for the seventh consecutive day, experiencing its biggest decline since May 2021.
Crypto miners were hit hard as well, with Marathon Digital (MARA) and Iren (IREN) both dropping almost 14%, Hut 8 (HUT) falling 12%, and Riot Platforms (RIOT) losing 11%. Bitdeer stock has also been hit badly, down 8% on the day and over 40% over the past month.
Crypto Liquidations Surge Past $1bn as Asia Faces Market Turmoil
Turmoil in Monday’s Asia trading session in the traditional markets has spilt over to crypto, with 276,100 traders liquidated for a total of $1.06bn.
Monday started on a rough note as Japan’s stock market experienced a significant sell-off that could confirm long-held fears of a global recession.
In particular, the Nikkei and Topix indexes fell by 12.4% and 12.23%, the most significant single-day drop since the “Black Monday” of 1987. The Nikkei lost 4,451.28 points, the largest in its history.
South Korea’s Kospi index also experienced an 8.77% drop.
Over 276,100 Crypto Traders Liquidated
The Asian market turmoil had an immediate domino effect on the crypto markets, causing Bitcoin to post a local low of $49,000 and Ethereum to drop to $2,111.
As a result, the 24-hour liquidations, according to Coinglass, have hit a staggering $1.06bn, affecting 277,898 traders. The majority of the liquidations came from long positions, at $902.24m, and short positions, at $154.22m.
Source: Coinglass
It Could Get Worse with the American Session of Trading
However, the over $1bn in on-day liquidations might increase should the sea of red in the Asian trading session spill over into the American trading session.
The one-day BTC/USDT chart below shows that Bitcoin has instantly entered bear territory below the 50-day (red), 100-day (yellow) and 200-day (green) moving average. The Stonksy indicator has also entered bearish territory below the zero line, and its momentum has turned dark red.
In terms of support, levels of interest include $49,000, $45,879, $44,700, $42,000, and $40,000. A worst-case scenario would be a flash crash to the 200-week (black) moving average located around $38,000.
In the case of Ethereum, the one-day ETH/USDT chart below shows that with the dip to $2,111, Ethereum entered bear territory on a macro level below the 200-day (black) moving average.
The number two digital asset has since rebounded above the crucial moving average. However, the Stonksy indicator suggests a retest of $2,000 in the following days should the situation not improve in the global markets.
Bitcoin's Ultimate Price Will be Between $700k and $24m - Analyst
A comparison of Bitcoin adoption to that of the internet suggests that BTC’s final value could be between $700,000 and $24m.
With bitcoin ETFs (exchange-traded funds) going live in January, traders and analysts have been busy forecasting how high BTC’s price will go with the influx of “big money” from institutional investors.
For example, one prediction has forecasted Bitcoin at $150,000 with a Trump victory in November. In another prediction, the team at Bernstein sees Bitcoin hitting $200,000 by 2025 and $1m by 2033.
Bitcoin’s Final Value Could be Between $700k and $24 Million - Willy Woo
But how high can Bitcoin go?
In a recent post on X, veteran Bitcoin analyst Willy Woo suggested that if adoption is high, BTC could one day be valued at $24m.
“Nobody knows what the ultimate price of Bitcoin will be but simple maths can give us an upper bound. All wealth assets is $500T, if BTC captured all of this (never gonna happen) it's $24m per coin (today's value before future inflation adjustment),” he wrote.
Mr Woo was, however, realistic that the chances of such a scenario of $24m per Bitcoin were slim.
He added, “BTC, even in this early phase of an asset class, Fidelity recommends 1-3% allocation, while we have seen numbers as high as 85% from BlackRock. If we assume 3% as a sensible allocation (and I note that was the number we used to share back in 2014!), then the lower bound of valuation is $700k.”
Bitcoin Adoption is Still In its Early Phase
As to when Bitcoin might reach its final value of between $700,000 and $24m, Mr Woo provided the following adoption S-curve comparing Bitcoin to internet adoption since the early 1990s.
Source: @woonomic on X
He explained that Bitcoin adoption was still in an early phase, and a world adoption rate of between 16% and 50% could provide a timeline for the ultimate value of BTC.
“16% is early majority, 50% is late majority. Wealth management is somewhere in this sector. So figure out when BTC adoption enters 16%-50% world adoption based on the yellow line,” he wrote.
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