Weekly Market Update: Psychological Levels

There was a time when $100K BTC was a dream, talked about by dreamers who had a lot of vision and more than a little hope. This week we got close, very close to hitting that mythical number.

Unsurprisingly, there are a lot of people selling at that level. It’s a magic number, a psychological level that for many is too good to pass up. Enter the sell wall. It is gonna take some effort to break through it. 

Parking the price action, there was a huge amount of goings on in the crypto space. A couple of leading regulators in the US have resigned off the back of the Trump win. Meanwhile, the action in the institutional space is hot to say the least. 

ETF volumes were at record levels, Microstrategy bought again, Tether got its major bank on the cap table and Sui has a partnership with a big hedge fund. Outside of the big players, Solana’s yield is at all time highs and you can earn interest on your USDC. 

In macro market news, news of a possible peace deal in the Middle East led to oil prices dipping. 

In the US, the job market continues to show strength and that is helping their housing market. On the flip side the US manufacturing tipped into contraction while the eye-watering Federal debt is finally getting some attention. 

In Europe; the UK‘s CPI surprised to the upside while German business confidence is declining. Across Europe they continue to struggle with slow growth and debt. 

In APAC, Japan’s economy is putting out solid numbers. India’s PMIs continue to run hot, possibly too hot, while China’s central bank left its key loan rates unchanged. 

Turning to Australia, manufacturing continues to contract, but at a slower pace. It’s a little worse in New Zealand as the recession is deeper here. The big news this week was the RBNZ’s OCR decision, it seems they took the easiest option before they go on 3 months holiday and delivered a 50 bps cut.

Like prices, market sentiment has retraced from last week’s heady numbers, however we remain in extreme greed territory.

Highlights this week: 

• This week has seen BTC edge within a few hundred dollars of the $100k mark, only to retrace back to the low 90’s.  ETH finally caught a run while a few Alts have been absolutely flying. 
• In aggregate, there is a pretty even spread of gainers and losers on the 7 day chart.
• This has been reflected in the Buy-Sell ratio with it coming in about even. However, by value there is a clear trend towards the sell side. 
• Large cap altcoins, led by SOL, ETH and XRP have been traded way above their averages, particularly on the Sell side. 
• At the time of writing BTC was down 1.5% for the week. XRP up another 24%, while ETH was up 5%. Meanwhile, SOL and BNB went backwards. 
• Stellar (XLM) went on a wild ride this week, up 94%.
• BONK was the worst performing asset, down 25% this week. 

View all top gainers: Visit the top gainers page to find out more. 

Highlights from the crypto space

SEC Chairman Gensler announced he will step down on the 20th of January, potentially putting an end to the ambiguity around crypto assets in the USA.

On top of this, the FDIC chairman, and rumoured architect of the US’ operation choke point, is stepping down.

A Chinese court has ruled that it is legal to own crypto under Chinese law. 

NYDIG analysed the ETF reports to September, and while institutional adoption has been growing, 78% of the ETF holders are retail non-filers. 

Coinshare reports that last week was the largest ever for digital asset investment products.

We’ve seen an uptick in Bitcoin Hodlers selling. $100k is a magic number and even some long term holders are taking profit.

The sell wall on Coinbase is…something. It is going to take a little effort to get through that. 

On the other side, MicroStrategy bought another 55, 000 BTC.

The return (APY) from Solana staking hit an all time high. Staying with Solana(ish), Solana only DEX Raydium is now the biggest Dex by volume. 

In a surprise to literally no one, apparently 76% of Twitter influencers are promoting dead memecoins (those who lose >80% of their value).  

Pump.fun had to remove its live stream feature due to some very unpleasant and harmful behavior was observed. 

Coinbase is delisting wBTC due to Justin Sun’s involvement with the project. They have launched their own wrapped BTC product. 

Some folks are saying that the cost of MiCA compliance is going to force a wave of consolidation for European crypto businesses.

Other notable highlights:

• Coinbase is paying you yield to hold USDC on the CEX.
• A number of companies are copying MicroStrategy and adding (albeit small) amounts of BTC to their balance sheet. 
• One of Tether’s most important banking partners, Cantor Fitzgerald, bought a 5% stake of the company and is supposedly doing so because they are politically connected to the Trump administration. 
• Sui has teamed up with Franklin Templeton to scale its network and make decentralized tech more accessible.

Additionally, Sui is partnering with Babylon Labs and Lombard to launch Bitcoin staking in December.

The partnership will bring BTC liquidity to the ecosystem, boost DeFi with LBTC as collateral, and give Bitcoin holders more ways to put their assets to work.

🌎 Macro news TLDR: …Oil dips

Oil prices have been edging up recently but dipped on news of a peace deal in the Middle East. 

U.S. economic news

US Jobless claims fell, reinforcing the strength in the job market. This confidence looks to be spilling into their housing market which is up. 

Flash PMI for November has manufacturing stagnant in contractionary territory, while services is flying at 57. 

The growing US debt is starting to worry the bond market, and that could affect President elect Trump’s plans. Staying with President Trump, he issued a stark warning to China, Canada and Mexico that tariffs are coming. This sent global currencies into a downward spiral. 

Over in Europe….

UK CPI for October rose more than expected, solidifying the BoE’s course of gradual rate cuts. 

Business sentiment in Germany has deteriorated. 

The ECB’s financial stability report highlights the block’s problems, slow growth and too much debt. This is supported by PMI data for both manufacturing and services contracting. 

And in Asia Pacific…

Japanese exports have recovered from last month’s dip. Japanese CPI dipped to 2.3% in October and PMI stayed positive. 

Meanwhile India’s manufacturing PMI continues its hot run, perhaps too hot. The PBoC left its prime loan rates unchanged, as did the Indonesians. Singapore’s inflation hit 1.4%, its lowest in over 3 years. 

Australia’s PMIs remain in contraction, although manufacturing did improve this month. 

In New Zealand, a group of economists (possibly left leaning) has called out the government’s fiscal policies as prolonging the recession. 

A speech by the Treasury this week said “recent data has suggested that the economic downturn has been deeper, and the recovery may begin later”. 

Supporting this is the continued decline in retail sales, with the September quarter number down again. The RBNZ went for a 50 Bps cut at today’s monetary policy committee meeting citing a weakening labour market, slow global growth and inflation within the band as reasons.

That’s a wrap for this week. 

Stay tuned for the next update.

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