Daily News | Crypto Market Begins To Descend Further As Stock Market Follows Suit; Vitalik Buterin Divulges The Final ‘Challenge’ For Ethereum

2023-01-25, 02:33

TL; DR

🥂 Good morning, today is Wednesday, Jan. 25th, 2023. We hope you guys have had a positive start to the week. It’s going to be yet another great day – so let’s get right into it!

Macro: After strongly entering the week and appearing to rebound, the stock market has since begun to fall as corporate earnings and business activity surveys have been released to indicate the current health of the global economy. With issues related to the opening of the New York Stock Exchange’s auction. However, in spite of this, the Asian stock market landscape appears to be holding strong and is still demonstrating consistent growth.

Crypto: The total market cap according to Coinmarketcap is $1.02T, having fallen by 2.61 in 24 hours. As the market cap has fallen, as have a majority of the top twenty assets across the past 24 hours, with losses averaging between 1-5% marketwide. This is likely a result of the potential correction of the stock market paired with increasing numbers of economic and business-related data being released to indicate the health of the global economy. However, Avalanche (AVAX) appeared to suffer the most across the past day, shedding a total of 6.87%, totaling $16.15. Assets that have lost a similar volume include Cosmos (ATOM), Chainlink (LINK), and Uniswap (UNI).

Topic of the Day: Vitalik Buterin Divulges Final ‘Challenge’ For Ethereum

Notable Headlines: Cardano developers address the incident that caused the blockchain’s nodes to briefly go offline this weekend; The UK Government is hiring a CBDC lead; Nayib Bukele snaps back at critics as El Salvador pays $800 million debt in full; Long dormant ETH whale stakes 49K ETH; Vitalik Buterin proposes ‘stealth address’ to enhance blockchain privacy.

Macro at a Glance: Corporate Financial Data Surveys Have Been Released And Paint A Dismal Picture For The Global Economy

With the week having opened on a seemingly strong start for the international economy, the tables have quickly turned in the past 24 hours, with a majority of western stock markets have taken a hit in light of data releases. The recent emergence of corporate earnings and business activity surveys has acted as a testament to the current turmoil of the global economy, leading investors’ confidence to waver. As a result, Wall Street’s benchmark S&P 500 closed the day down by -0.10% and the Nasdaq Composite slipped by triple this value, spiraling it by -0.30%.

However, in spite of this recent bearish outlook, a JPMorgan analyst has stated that there is a ‘better sentiment on the [growth] outlook’, which led the S&P 500 to soar to its highest level since early December on Monday of this week, with technology and semiconductor stocks charging upwards bullishly. Yet, this positive outlook has quickly been diminished as the US Bank has stated that it is not expecting the current January stock market rally to carry into the remainder of Q1, stating that: ‘The recent weakening of economic data and an anticipated decline in earnings expectations and weak [full-year] guidance is pointing to markets that are likely to move lower.’.

On a more positive note in relation to western equities markets, it has been reported by currency analyst, Lee Hardman, at MUFG that traders have ‘fresh confidence that central banks can pause their rate hike cycles’ throughout this year as concerns regarding the prospect of further inflation and a recession on an international scale have intensified. His optimism comes in light of US Federal Reserve and European Central Bank officials insisting that the fight against inflation is far from over, as demonstrated by the bearish data released today and the corresponding hit the stock market has taken.

In spite of the current turmoil in the western equities markets, a range of Asian stock markets have been privy to notable gains across the past 24 hours. The economic reopening of China has positively correlated with its equity market, leading to an increase of +0.76% in the past day, with this bullish momentum extending to Hong Kong and India. As a result, this paired with the easing recession fears in Europe and the cooling of US inflation are leading some international investors into a sense of optimism, regardless of the more microeconomic details.

As the stock market continues to shed value, it is indicative of the current global economy still being thwarted by the long-lasting effects of the COVID-19 pandemic, the spiraling gas and energy prices in Europe, and international inflation. As these repercussions continue to reverberate throughout the global economic markets there appears to be little sign that the stock market will emerge strong and bullishly power through, particularly as a correction is imminent.

Today’s Markets on Jan. 24th 03:21 GMT+8 💡

BTC -1.28% at $22,680.95; ETH -4.67% at $1,553.37.

Asia: Australia -0.42%; Japan -0.02%; Hong Kong +1.82%; China +0.76%; India +0.06%.

Europe: London -0.28%; Paris +0.40%; Frankfurt -0.07%.

US Spot Indices: Dow +0.03%; S&P -1.40%; Nasdaq -0.69%.

US Index Futures: Dow -0.49%; S&P -0.43%; Nasdaq -1.28%.

US Two-year Treasury is down by -0.001% at 4.152%.

US Ten-year Treasury is down by -0.018% at 3.451%.

UK Ten-year Gilt Bond had a -0.083% change and is at 3.277%.

US Dollar Index 0.00% at 101.92.

FX in 24hrs: GBP: -0.15%; EUR: +0.00045%; JPY: +0.07%; CNY: +0.0087%.

Gold +0.10% at 1,937.50; Light Crude +0.14% at 80.24.

Market Catalysts This Week 🧠

Thursday: BEA Issue GDP Estimate For Q4
Friday: BEA Issue PCE Price Index

Catalysts next week 🗓

Monday: JPN Jobs/Unemployment Figures
Tuesday: S&P HPI Composite, CB Consumer Conference

Crypto Daily Digest: Crypto Market Experiences Further Pullback As The Stock Market Has a Positive Open; Is Market Stagnation Here?

With the global economic stage having been thwarted by conflicted bullish and bearish data and sentiments, resulting in a significant drop in western equities markets, this appears to have carried over to crypto. Across the past 24 hours, almost all of the top 20 assets have taken a notable hit, shedding between 1%-7%. The dramatic decline in the cryptocurrency markets’ value serves as an indicator that the bullish wave we recently saw sweep the market off its feet could have been a mere fad and not a sign of an incoming bull market. BTC has continued to maintain its footing above $22,000, however, having declined by a moderate 1.28% in the past day and changing hands at an average of $22,680. Unfortunately for Ethereum, however, it has declined by 4.67%, forcing it through the $1,600 price floor and back towards the mid $1,500 range. These losses have stretched across the market, leading the total market cap to decline by 2.61% to $1.02T.

In related news, Cardano developers address the incident that caused the blockchain’s nodes to briefly go offline this weekend. Across the weekend, the Cardano network suffered a 50% outage on relay and block-producing nodes, with the root cause currently unknown. The disconnection and restarting of these nodes is reported to have been ‘triggered by a transient anomaly’ which either led to the disconnection of nodes from a peer or nodes throwing an exception and restarting. However, developers insisted that the entire network did not go down and that a majority of the nodes impacted had ‘gracefully recovered’.

Additionally, it was also reported that the UK government have looked towards hiring a Central Bank Digital Currency (CBDC) lead to take control of the ‘strategic direction’ of the UK’s treasury as they seek to create and deploy an effective digital pound. This comes in light of the UK government beginning to further crackdown on cryptocurrency regulation as pressure mounts from the EU’s creation of the MiCA policy, which is set to be enforced in June of this year.

Among the top 20 coins, a majority have suffered losses, despite the primarily positive uptick in value on a weekly scale. Avalanche has seen the greatest losses in the past 24 hours, losing 6.87% and trading hands at an average of $16.95%. With no top 20 assets having any respite from this sudden onset bearish wave, it is likely that this momentum may disrupt what investors believed to be the exit from the crypto winter.

With the cryptocurrency market now mirroring the gradual decline of the western stock market once again, it is plausible that the performance of the latter in the coming days paired with global economic data may begin to negatively impact the cryptocurrency market’s performance further. This could dispel rumors that the recent bullish wave was indicative of the onset of a bull market and instead show that crypto winter is far from over.

Top 20 Coins Performance 🌐

BTC -1.28% at $22,680.95; ETH -4.67% at $1,553.37.
BNB -1.23% at $301.91; XRP -4.20% at $0.4052; DOGE -5.28% at $0.08401.
ADA -5.56% at $0.3548; MATIC -3.90% at $0.9545; DOT -6.58% at $6.15.
TRX -4.66% at $0.06; SHIB -6.74% at 0.00001119 LTC -3.76% at $86.79.
SOL -5.41% at $22.90; UNI -6.74% at $6.25; AVAX -6.87% at $16.95.
ATOM -5.09% at $12.39; LINK -5.19% at $6.67.

Topic of the Day: Vitalik Buterin Divulges Final ‘Challenge’ For Ethereum

With the Shanghai Upgrade imminent and the successful ution of the Merge, the Ethereum network is seemingly adopting a hands-on approach to addressing its operational flaws as a means of improving its technology and that of wider blockchain technology. In an effort to better build upon this mission, Vitalik Buterin acknowledged the growing need to create a privacy solution, because by default all information that is fed into a public blockchain is made public also. This has led Buterin to propose the concept of ‘stealth addresses’, which have the potential to add a layer of anonymity to peer-to-peer transactions, NFT transfers, and Ethereum Name Service (ENS) registrations.

Elaborating on the concept further, Buterin explained that a ‘Diffie-Hellman key exchange’ paired with a ‘key blinding mechanism’ would need to be implemented to ensure that the link between a stealth address and a user’s meta-address can be seen publicly. This in essence still promotes decentralized transparency, while also ensuring that transaction and user information can remain private and secure. However, Buterin also acknowledged the ‘longer-term usability concerns’, including social recovery issues, yet remains confident that these issues could be solved in time.

Ethereum (ETH) $1,538.32 (-4.67%) - Neutral Outlook

Ethereum (ETH) Overlook:

Closest daily support zone: 1,562.75-1,630

Closest daily resistance zone: 1,611.75-1,595

**Key level: $0.4304 (Monthly High Of January 2023)

Daily Resistance Zones:

1,553.84-1,566.03
1,611.75-1,595
1,629.71-1636.4

Daily Support Zones:

1,633-1,639
1,611.21-1,622.92
1,549-1,556.75

Data Courtesy of CoinMarketCap

As of today, ETH has taken a notably bearish turn, emerging on a downtrend into the coming day. Having opened the day at an average of $1,637, ETH began to trade horizontally before sinking beneath its 7-day SMA and falling victim to volatility, leading it into a spiral that forced it beneath the $1,600 zone that bulls fought to push beyond, and back into the upper regions of the $1,500 zone.

However, while this sudden downtrend is incongruous with Ethereum’s performance across the past few days, Ethereum still remains above the price threshold from which it was trading at this time last week when the bullish wave had taken the market by full swing. This suggests that despite the current downward momentum that Ethereum may still be in promising price territory, particularly when this data is compared with its upwards price trajectory demonstrated across the past month. Overall, this current decline may be indicative of a minor price correction for the asset.

It can be ascertained that with Ethereum’s increasing press coverage and the imminent Shanghai Upgrade that the asset may continue to gain positive price traction and that it could continue along its monthly positive upswing in value without falling susceptible to bearish market conditions.

Notable headlines

🔹 Cardano developers address the incident that caused the blockchain’s nodes to briefly go offline this weekend.

🔹 The UK Government is hiring a CBDC lead for their treasury team to determine the ‘strategic direction’ for the future digital pound.

🔹 Nayib Bukele snaps back at critics as El Salvador pays $800 million debt in full after reports were released of its defaults.

🔹 Long dormant ETH whale stakes 49K ETH leading analysts to become hopeful that increased ETH staking participation can lead to ETH price rally.

🔹Vitalik Buterin proposes ‘stealth address’ to enhance blockchain privacy as a means of offering the same privacy properties as generating a new address.

Author: Matthew Webster-Dowsing, Gate.io Researcher

*This article represents only the views of the researcher and does not constitute any investment suggestions.

*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all cases, legal action will be taken due to copyright infringement.