This weekly piece of cryptocurrency price analysis and thought leadership is brought to you by the expert team at CEX.IO, your crypto guide since 2013. At CEX.IO, we’re committed to providing the latest industry developments and potential price scenarios to help our users make the most informed decisions along their crypto journeys.
In this week’s update, we explore the price movements of BTC, MANA, MATIC, and AVAX. Additionally, this recap includes other notable market news over the last seven days.
Read along for in-depth breakdowns, and enjoy reviews of correlated markets.
Notable market events
SEC charged Gemini and Genesis for the unregistered sale of crypto asset securities
In its lawsuit, the U.S. Securities and Exchange Commission (SEC) alleged Gemini and Genesis sold unregistered securities through the Gemini Earn program. The regulator accused the Earn program of being an unregistered security, and claimed that the program’s offerings should have been registered with the regulatory body. In its press release, the SEC also stated that Genesis’ closing of lending withdrawals left 340,000 Gemini Earn customers, and about $900 million in crypto, in limbo.
Tyler Winklevoss, a co-founder of Gemini, responded to the charge, saying that the New York State Department of Financial Services (NYDFS) regulated the program. Winklevoss also added that Gemini was discussing the Earn service with the SEC for 17 months, and that the company will defend itself “against this manufactured parking ticket.”
At the same time, the Financial Times reported that Genesis’ debt exceeds $3 billion. Citing people familiar with the matter, the outlet stated that Genesis’ parent company, DCG, is looking to sell some of its venture-capital portfolio, worth around $500 million, to solve liquidity issues. Recently, DCG informed its shareholders the firm is suspending dividends until further notice to “reduce operating expenses.”
FTX “found” $5.5 billion in liquid assets
According to Adam Landis, an attorney from FTX’s legal team at Sullivan & Cromwell, FTX has found $1.7 billion in cash, $3.5 billion in liquid crypto assets, and $0.3 billion in securities. It’s assumed that funds will be added to FTX’s bankruptcy estate for reimbursing creditors. But over $1 billion of the reportedly discovered crypto assets include FTX’s FTT token, and almost 15% of the total supply of SOL tokens. As some crypto enthusiasts noticed, these and other crypto assets in the FTX portfolio can be called questionably liquid.
Nevertheless, this announcement substantially raised the total funds FTX claims it holds. In December, the company’s new leadership said it could find just over $1 billion. Adam Landis stated that there’s still a sum missing from what is owed to customers. As a result, the total amount FTX owes its creditors remains unclear.
This windfall may not be good news for all FTX customers, as the compensation may depend on the ruled pecking order. For example, the results of the Celsius case haven’t been in favor of customers. A judge presiding over the bankruptcy case of that firm ruled that certain customer assets became the property of Celsius after they were deposited. The decision was rendered based on the platform’s terms and conditions. Hence, customers became unsecured creditors, pushing them down the line in terms of compensation priority.
Following this news, the FTT token experienced an over 100% rally in a week.
Shina Inu developers revealed the Layer-2 blockchain Shibarium
Shiba Inu developers announced the launch of their Shibarium Layer-2 solution. It will operate on top of Ethereum, and aims to facilitate faster transactions, while lowering fees.
The move could further bolster native to Shiba Inu SHIB and BONE tokens. Each transaction on Shibarium will burn a certain amount of SHIB tokens, but the specific amount has not yet been decided. BONE will be used to pay for gas transactions and reward stakers within the Shibarium protocol. In addition to BONE, validators and delegators will also be allocated a portion of the forthcoming TREAT token. TREAT token will be launched to incentivize liquidity pools on ShibaSwap.
A testnet of Shibarium is expected to debut in the coming weeks.
El Salvador passed a bill to allow Bitcoin bonds
El Salvador’s legislative assembly approved a digital securities bill, allowing the country to issue bonds based on Bitcoin. The bill was first introduced in Parliament last November. According to local media, the main purpose of the legislation is to facilitate the issue of so-called Volcano bonds. In addition, the bill asks for the creation of a national digital assets commission that will serve as a crypto regulation body, and a promoter of the market.
BTC shows bullish signs in the long term, but bearish in the short term
Bitcoin broke the resistance area near $18,347 (purple line) and an established descending line. This helped the bulls to push the price above $21,000. As we mentioned earlier, RSI indicated a strong bullish divergence on the weekly chart (white lines), meaning that an upward movement was likely to follow. After the recent rally, the weekly RSI entered the neutral zone. This means the price rally still has the potential to continue.
The next target for the bulls could be the 200-week MA (blue line), which is located near $24,880, and one of the local highs (green line). In the previous cycle, 200-week MA acted as a major support for the price. If the price consolidates above this level, this could be another confirmation of the bearish-to-bullish trend reversal.
However, the four-hour chart hints at a potential short-term correction. After moving above $21,000, the bullish momentum began to subside, because the asset reached the overbought zone. RSI generated a strong bearish divergence (white lines), meaning a correction may occur soon.
At the moment, Bitcoin is trading near its previous local high level of $21,500. Typically, a correction could be considered complete when it reaches the 0.5 Fibonacci level, or around $19,000. In the case of Bitcoin, the potential correction may also reach the 0.618 Fibonacci level, as this level corresponds with the previous resistance and breakout point.
If Bitcoin manages to defend 0.5 or 0.618 Fibonacci levels, this could reestablish the upward movement. Otherwise, bearish pressure may increase.
In total, it may be a little too early to say that a new bull market has commenced. Bitcoin may need to protect support levels to confirm that the recent rally forms an uptrend.
MANA struggles to reclaim resistance
Decentraland (MANA) became one of the top performers over the last week, experiencing a price increase of over 70%. The potential catalyst behind this movement could have been the introduction of new features for users of the Decentraland metaverse. In addition, metaverse tokens became one of the best-performing digital assets this month, meaning MANA’s rally could be fueled by increased optimism in the space.
Such a rapid price movement pushed RSI to the overbought zone. The asset struggled to move above the $0.73 resistance area, and experienced long upper tails on the daily candles. This indicates that sufficient selling pressure could take place above $0.73.
In case of correction, the asset could move to $0.6 (orange line), and $0.5 (red line). A bounce off $0.6 could lead to the potential formation of the Flag pattern, with a price target near $1.1. In turn, $0.5 remains a crucial support level for MANA, which bulls need to protect to validate a potential uptrend.
Positive news moved MATIC to the overbought zone
On January 6, Polygon announced its partnership with Mastercard to help emerging musical artists create their personal brands through Web3. Furthermore, on January 17, Polygon underwent a hard fork focused on improving the user and developer experience. The fork aimed to “smooth out” gas fee spikes, and resolve the issue with chain reorganizations.
Developments in the Polygon ecosystem, as well as a bull run of the crypto market, helped the bulls reach a major resistance area near $1.02. This area typically acts as a psychological level for MATIC.
Bulls made several failed attempts to sustain above this area, while the asset reached the overbought zone. This may cause a temporary consolidation period, or a correction to $0.95 and $0.87. A breakout of the $1.02 resistance area may reinforce the optimism on the market and push the price to a local high of $1.3.
AWS partnership pushed the AVAX price
On January 11, the team behind Avalanche development, Ava Labs, announced joining forces with Amazon Web Services (AWS) to support wider adoption of blockchain technology by enterprises, institutions, and governments.
According to the blog post, the partnership will make it easier for developers to launch and manage nodes on the Avalanche blockchain, as AWS will support Avalanche’s infrastructure and decentralized applications (dApps). In addition, Ava Labs plans to add subnet deployment to the AWS Marketplace, enabling both individuals and institutions to launch custom subnets within the Avalanche network.
The AVAX price experienced a 30% increase within hours of the announcement. This helped the asset to break the descending resistance line (blue line) and major resistance near $14.6 (orange line). However, daily momentum indicators hint that bullish pressure may fade away soon. Another bearish factor could be allegations that Avalanche’s partnership with AWS was fake.
As a result, the AVAX price may retest $14.6 to confirm a potential bearish-to-bullish reversal. If failed, the asset may move to $10.8, or the level where the rally has begun. If successful, bulls may push the price to the previous local high near $19.6.
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Disclaimer: Not investment advice. Seek professional advice. Digital assets involve risk. Do your own research.