Shiba Inu Readies its Layer-2 Blockchain, Genesis Global Files for Bankruptcy, and the Ethereum Network Hits a New Record

A second week of green woke up markets from a deep crypto winter, while the Ethereum Network continued to blaze forward leading up to the Shanghai Upgrade. A new staking index was created to track PoS coins and South Korea launched its metaverse replica of Seoul.

Top Market Trends:

The Ethereum ecosystem continued to see growth, with infrastructure provider Flashbots shooting for a $1 billion valuation in its upcoming ~$50 million raise. The Ethereum Network also hit 500,000 validators just ahead of the upcoming Shanghai Upgrade, and ETH-based NFT volume on OpenSea jumped to a 3-month high.
Genesis Global’s institutional crypto brokerage firm filed for Chapter 11 Bankruptcy. In the process, the top 50 unsecured claims were made public; the biggest claimant was Gemini Trust Company, which is owed $766 million.
Shiba Inu developers announced the beta release for their Layer-2 network Shibarium, which will run atop the Ethereum Network. It is set to decrease costs and increase transaction speed while using BONE tokens as gas.
The US Department of Justice charged the founder of an obscure Russian crypto exchange, Bitzlato, for processing $700M in illicit funds. A meme storm emerged around the topic because literally no one in crypto had heard of Bitzlato.

Movers and Shakers

Top 7-Day Gainers:

FXS +54.4%
MANA +52.0%
ENJ +37.9%
HNT +34.9%
CRV +30.4%

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Top 7-Day Losers:

FLR -10.8%
LDO -4.1%
TWT -3.4%
HT -2.8%
OSMO -2.4%

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Bitcoin Pulse

Bitcoin price continued to claim its pre-FTX crash support level and is close to a complete recouping of its losses since November. JP Morgan’s Jaime Dimon was busy on another “blockchain not Bitcoin” news circuit, while analyst Axel Adler pointed to Bitcoin whales massively accumulating as a sign that bulls could stay in control.

BTC jumped to start the week, entered another accumulation phase, and then experienced a selloff before resuming consolidation.
With the price surge, Bitcoin may have entered overbought territory; daily RSI has hovered around 90, which could mean a pullback.
After the late-week sell off, BTC price appears to be settling around the $20,500 support level and sentiment appears confident of another upward surge.

BTC - Low Timeframe

tl/dr:

Consolidating sideways, interacting with daily 200 EMA on higher time frames.
Aggressive sell-offs after mitigating bearish HTF order block.
Taking 4H/1H sell-side liquidity, mitigating bullish order blocks, and breaking below 50 EMA.
Retraced into range's equilibrium, direction depends on HTF sentiment.
Two possible scenarios:

Breaking above and retesting 50 EMA, targeting $21700 to continue bullish trend.
Deeper retracement to $20,400 before continuing bullish trend or HTF bearish sentiment leading to break below 1D sell-side liquidity.

As we can see, the LTFs have continued to consolidate sideways as we interact with the daily 200 EMA on the higher time frames; however, after mitigating the bearish HTF order block, we saw aggressive sell-offs.

This sell-off led to the taking of 4H/1H sell-side liquidity; mitigating bullish order blocks in discount of the current trading range (1D), and a break below the 50 EMA, all of which had been anticipated on our Wednesday breakdown.

Now that the price has retraced into the range's equilibrium, whether we continue to break higher or see a take of 1D to sell-side liquidity is dependent on the sentiment provided by the HTF. The following are 3 possible scenarios:

Now that we have broken above and retested the 50 EMA price targets the $21700 price level to continue the bullish trend.
Price has a deeper retracement into the $20,400 price level before starting its bullish continuation of the trend.
HTF bearish sentiment takes over leading to a break below 1D sell-side liquidity out into the wider price range.

BTC - Macro View

tl/dr:

BTC/USD consolidating at a significant area of value for short sellers and previous buyers to take profits, bringing bearish pressures into the market.
It remains uncertain whether this bear pressure will lead to a retracement or be met with continuous buying.
Reaching the premium of the monthly range, mitigated bearish order blocks in premium, daily 200 EMA, and closed daily fair value gaps.
Positioning for the following scenarios:

Retracement to $18,500 price point, aligned with the equilibrium of the daily range, 50 EMA, and bullish order blocks in discount if value is found for bearish momentum.
Sustaining above the 200 EMA and moving deeper into bearish order blocks in premium before shorts come into play if value is not yet found for shorts.

BTC/USD has spent this week consolidating at a significant area of value for both short sellers to enter and previous buyers to look to take profits, bringing bearish pressures into the market.

Whether this bear pressure will be significant enough to push prices lower, initiating a retracement or, if it will be met with continuous buying leading to sideways consolidations before we continue the bullish momentum, remains to be seen.

Given that we have now reached the: premium of the monthly range; mitigated bearish order blocks in premium; have reached the daily 200 EMA and have closed daily fair value gaps, we watch and position ourselves accordingly for the following scenarios:

Value has been found for bearish momentum so we look for a retracement down to the $18500 price point, aligned with the equilibrium of the daily range, 50 EMA, and bullish order blocks in discount.
Price has not yet found value for shorts so we sustain above the 200 EMA and make our way deeper into bearish order blocks in premium before shorts come into play.

Altcoins on the Move

Ethereum (ETH) price hit a 9-day green streak for the first time since March of 2022. Continuing with its upward momentum, ETH dipped along with Bitcoin after US retail numbers were announced, but quickly regained support at the $1550 price level.

Metaverse tokens were among the week’s top performers, with Decentraland (MANA) coming in at #1 over 7 days with 52.8% in gains and Sandbox (SAND) jumping 29.5%.
Frax Shares (FXS) emerged from its 8-month accumulation phase, finally breaking out of the $4-$7 price range.
January’s crypto gains will hopefully mean a strong start to 2023 and not just a “January Effect”, a common phenomenon whereby markets tend to rally to start the year.

Ethereum Macro

tl/dr:

HTFs of ETH and BTC are similar, key areas of value and confluence clusters have been met.
ETH broke and retested 200 EMA, traders may see it as a catalyst point.
Understanding market manipulation, a false breakout above 200 EMA may happen before retracements to $1300.
If shorts occur, look for price to reach $1300, 50 EMA, bullish order block in discount, and closure of 1D fair value gap cluster as support.
If longs win out, expect price to reach above $1670, mitigate bearish order blocks, and close further daily fair value gaps before pulling in buyers/sellers for bearish retracement.

The HTFs of both ETH and BTC are very similar, areas of value with confluence clusters have been met, while ETH has also broken and retested the 200 EMA. We can imagine many traders will be watching this level as a key catalyst point.

However, understanding the cycles of manipulation we expect to happen to shake buyers and sellers out before the main move initiates, we could be seeing a false breakout above the 200 EMA before retracements down to the $1300 price level take place.

If shorts are to take place we would look for price to reach the $1300 price level, 50 EMA support, bullish order block in discount, and closure of the 1D fair value gap cluster as the logical area of support.
If longs are to win out, we would expect price to make its way above the $1670 price high, mitigate bearish order blocks, and close further daily fair value gaps before pulling in enough buyers/sellers to fuel the bearish retracement to achieve efficient pricing (healthy retracements to fuel the next legs of price).

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