Recurring market commentary on what’s happening in the crypto markets, summarized by the Crypto Broker team at Crypto Finance AG.
Market commentary
Good morning!
For the last three weeks Bitcoin (BTC) has been in a sideways trend and ranges between $40,200 and $44,700. Over the weekend, BTC lost 1500 points reaching a low on Monday, a bit above the $40,500 level, before reversing relatively strongly and reaching it's high on Wednesday, slightly above $44,300, while trading currently around the $43,600 level. This price move can be mainly attributed to falling US yields and consequently a weakening USD over the course of the week, while risk assets got some headwind.
The DXY and US yields reached their low on Thursday evening before slightly recovering and sending BTC in the opposite direction of around 1000 points from its peak. Overnight, BTC recovered, hit the $44,300 range, and is currently trading around $43,700. I maintain the view that during the festive season, BTC will continue its sideways trend with occasional short-term volatility, eyeing a potential breakout around 10 January (possibly 8 January) in anticipation of the SEC's decision on the spot ETF approval.
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Ethereum continues consolidation
Ethereum (ETH) also began the week on a downward trend, dropping over 100 points over the weekend to a low of $2,115 from last Friday. It then experienced a volatile recovery, marked by lower lows and higher highs, culminating in a peak of $2,280 on Thursday afternoon and then shortly retesting the $2,200 level.
Overnight, ETH rebounded, climbing to just under $2,300, before pulling back, and did break out now trading currently at $2,315. The ETHBTC ratio continued its negative trend this week, starting at 0.0535, then dipping below the 0.05 mark on Wednesday, and with the recent breakout now just moving above the 0.053 level.
Altcoin surge led by Solana
In terms of volatility figures, bitcoin's 30-day implied volatility increased to 55% (+2% WoW) and Ethereum's slightly rose to 56% (+1% WoW). Despite choppy markets, the 25-delta skewness for BTC options has risen WoW across all timeframes, signalling a bullish outlook due to declining yields and anticipated spot ETF approvals. Meanwhile, ETH's figures remain positive, but unchanged from the previous week.
With ETH's subdued performance this week, the stage was set for other altcoins, especially Solana (SOL), which saw a notable 26% week-over-week increase. Peaking just below $100 this morning and currently trading around $95, SOL has hit its highest point since May 2022. This surge is attributed to its vibrant network activity and thriving Solana Program Library (SPL) token launches.
Furthermore, SOL surged ahead of Ripple (XRP) in terms of market capitalisation, securing the fourth spot (excluding stablecoins) among cryptocurrencies. Analysts ignited debates about ETH's market stance as SOL, known for its efficient transactions, gains ground.
Happy Trading!
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