A summary of market performance and factors driving markets over the last month, covering the macroeconomics as well as major cryptocurrencies
However, the sign of stability in BTC markets didn’t lift the altcoin markets. The Total Crypto Ex-BTC Market Cap gave up 10.36% of value in December, closed at USD 55.903 bln. The fall came after a 15% drop last month. The divergence narrative has continued to play out, as large-cap names have remained underperformed their mid/small-cap peers.
While December was relatively light on the news front, underlying factors like China’s moves in blockchain, the open sentiment on CBDC globally, and the upcoming bitcoin halving remained front and center in the medium/long-term market outlook.
Looking ahead, we expect trade volume and market volatility will gradually pick up around mid-January as traders return to work after the new year holidays. We also wanted to highlight the rising global geopolitical tensions and its potential price implication on cryptocurrency. The global uncertainty and economic stagnation have continued to fuel the rally of gold. If the demand for safe-haven assets persists, the bullish sentiment in gold could spill over to bitcoin.
Figure 1: Metrics of Major Cryptocurrencies in December (Source: Messari.io; Coin360)
Altcoin: Mid/Small-Caps Score Over Large-Caps
Figure 2: Altcoin Performances in December (Source: Coin360)
Figure 3: Crypto Total Market Cap Ex-BTC (Source: Tradingview)
Crypto News Highlight in December
Bitcoin: Less Volatility in December; Halving in Focus
Figure 4: OKEx’s BTC Index Monthly Performance (Source: OKEx)
Figure 5: OKEx BTCUSD Index Monthly Ranges (Source: OKEx)
Figure 6: Bitcoin-Gold/SPX Realized Correlation (Source: Skew)
Figure 7: Macro Assets Realized Volatility Comparison (Source: Skew)
Major Altcoins Correlation with Bitcoin Further Increased
Figure 8: Bitcoin’s Correlation with Major Altcoins (Source: Coinmetrics.io)
Bitcoin January Outlook: Cautiously Optimistic
7690 and 7849 could be the first and second levels to watch, as they are some of the previous highs. Also, the strength of the support at the 50-MA could be another indication.
Figure 9: BTCUSDT Daily Chart (Source: OKEx; Tradingview)
Figure 10: CME Bitcoin Futures Total Open Interest (Source: Skew)
Altcoin Strategy: Time for an ETH Comeback?
ETCETH has formed a daily triple top pattern; signaling ETC may not be able to continue to rally. The RSI also seems supporting that argument with a bearish divergence. Also, a MACD bearish crossover appears in the making.
Level-wise, the previous low near 0.0328 could be the first key level to watch. If seen, the testing of the area of 0.0304 could be increasingly possible.
Source: OKEx; Tradingview