Daily News | Crypto Market Continues To Stagnate As Stock Market Rebounds; XRP Rallies Amidst Bearish Market Streak

2023-01-24, 02:20

TL; DR

🥂 Good morning, today is Tuesday, Jan. 24th, 2023. We hope you guys had a positive start to the week. It’s going to be yet another great day – so let’s grab the bull by the horns!

Macro: The stock market has continued to rebound today, demonstrating that the recent fears surrounding inflation have diminished as investor confidence has been gradually restored. Even the Japanese stock market has demonstrated signs of recovery today, amidst concerns that it was negatively impacted by the current news regarding the Chinese economy and stock market, pushing it to gain 1.33% throughout the last day. On the other side of the shore, various EU CEOs have stated that they are ‘optimistic about the heat ahead’ for the stock market.

Crypto: The total market cap according to Coinmarketcap is $1.09T, having risen by 1.73% in 24 hours. In spite of the market cap increase, many of the top 20 cryptocurrencies have bore the brunt of the regeneration of the stock market, with many having fallen up to 7% in the past 24 hours. This is likely a result of global fears regarding the imminent correction of the stock market paired with growing inflation worries. However, despite the widespread decrease in value across the market, XRP has continued to rally as legal proceedings allude to the closure of the case. It is critical to continue monitoring the crypto space in the coming days to ascertain whether the recent bullish wave was indicative of market stagnation or a fully-fledged bull market.

Topic of the Day: XRP rallies amidst bearish market streak

Notable Headlines: MakerDAO approves the deployment of $100M USDC on the DeFi protocol Yearn Finance; Gemini is reported to owe $3,800,000,000 to their top 50 creditors since being bankrupted; The EU is set to impose capital requirements on banks holding crypto assets; Dogecoin reaches one billion dollars in trading volume; Developers finalize the first ‘shadow fork’ for the Ethereum Shanghai Upgrade.

Macro at a Glance: Global Markets Demonstrate Signs Of Recovery: Is A Correction Imminent?

As the week began, the global economy began to demonstrate signs of recovery, with stock markets from across the globe witnessing a promising uptick in value. With this recovery alluded to by market activity reported at the close of international markets on Friday, it comes as no surprise that the market has taken advantage of this promising sentiment and begun to rebound. However, with the threat of a major correction imminent, could this pose a threat to the current state of the international financial markets?

The recent Davos conference shed some light on the forthcoming state of the market throughout this week and the coming months, with various analysts and key figureheads remarking on critical economic, social, and political issues. However, most notably, it was noted that despite the recovery looming over the financial markets, inflation in the EU, UK, and USA is peaking. While this could be interpreted as a doomsday signal for the future of the global economy, many analysts have suggested that this could enable international Central Banks to limit the extent of future increases in interest rates.

The prospect of slowing interest rates has undeniably spurred a positive sentiment amongst those interested in the global economy, as this could signal the beginning of the end of the plague of international inflation contributed to by the COVID-19 pandemic, rising gas and energy prices, and the Ukrainian and Russian conflict. However, some analysts have noted the potential flaw in this optimistic outlook. If demand for oil and gas rises in China, it is possible that this may drive these prices further upwards, thus negatively impacting the slowing of western interest rates and inflation – potentially driving them to new heights. This would require Central Banks in the EU, UK, and USA to further increase and maintain interest rates, thus resulting in a recession.

However, in spite of the mixed outlook for the future of the global economy, various international stock markets have begun to regenerate value following the decline due to the mass sell-off on Wall Street, with the Japanese market seeing the biggest uptick in value totaling +1.33% amidst concerns that the repercussions of the Chinese economic data release will inadvertently affect the Japanese economy. This recovery has been reflected across Asia and has also been mirrored by the western world.

Despite concerns that the USA is bordering on a recession and the UK is nearing the 40-year recession high, western economic markets have been privy to moderate upticks in value, nearing 3% at its high, demonstrating that in spite of additional economic concerns, the western financial markets are still following suit of global markets in terms of recovery.
However, with the threat of a mass market correction imminent, as a result of losses greater than 10% but less than 20%, it is possible that this sudden surge in global stock market values could be a mere fad, as the threat of correction remains present in the coming weeks.

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

BTC: -0.10% at $22,807.10; ETH: -1.44% at $1,620.34.
Asia: Australia +0.068%; Japan +1.33%; Hong Kong +0%; China +0.76%; India -0.50%.
Europe: London +2.72%; Paris +0.50%; Frankfurt +0.5%.
US Spot Indices: Dow +0.37%; S&P +1.78%; Nasdaq +1.51%.
US Index Futures: Dow +1.58%; S&P +0.91%; Nasdaq +1.98%.
US Two-year Treasury is up by +0.038% at 4.232%.
US Ten-year Treasury is up by +0.048 at 3.527%.
UK Ten-year Gilt Bond had a -0.5% change and is at 3.364%.
US Dollar Index +0.12% at 102.1148.
FX in 24hrs: GBP: -0.0032%; EUR: +0.003%; JPY: +1.16%; CNY: +0.01%.
Gold +0.5% at 1,926.80; Light Crude +0.18% at 81.49.

Market Catalysts This Week 🧠

Tuesday: S&P Global Composite PMI For January
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?

As the global economic stage has begun to demonstrate signs of improvement, the cryptocurrency market appears to have been negatively affected, with a majority of assets in the top 20 shedding up to 7%. With a dip of -0.10%, BTC continues to hold steady in spite of this recovery, remaining at a promising four-monthly high of $22,807.10. Ethereum has also been subject to more notable losses, shedding 1.44% in the past 24 hours, leading it to $1,620.34. However, in spite of these minor losses, the cryptocurrency total market cap holds strong at $1.09T, according to data provided by Coinmarketcap, suggesting that the market is remaining strong in spite of the adversity.

In related news, Ethereum developers have reported the finalization of the first ‘shadow fork’ ahead of the Shanghai Upgrade. The purpose of the ‘shadow fork’ is to act as a test version of the actual mainnet ahead of its upgrade, allowing developers to foresee any potential flaws within the coding. It was reported by developers that some minor technical issues were noted, yet these were addressed by developers after various Ethereum nodes began using Geth clients following the fork.

Additionally, it was also reported that the recently bankrupted cryptocurrency exchange, Gemini, now owes over $3.8 billion to its top 50 creditors. These top creditors include the likes of hedge fund manager VanEck and the Stellar Development Foundation. One of the top creditors, Mirana Corp, who is owed over $151 million, also recently filed for bankruptcy and allegedly sued Three Arrows Capital (3AC) over a loan agreement.

Among the top 20 coins, a majority have suffered losses, despite the primarily positive uptick in value on a weekly scale. Uniswap has seen the greatest losses in the past 24 hours, losing 3.33% and averaging $6.71. With the majority of the top 20 having shed moderate amounts of value, it was XRP that transgressed against the hegemony and continued to be influenced by the recent bullish wave and positive investor sentiment, increasing by a total of 4.79% and reaching a monthly high of $0.4304.

As the cryptocurrency market appears to be alluding towards an inverse correlation with the performance of the stock market, it is critical to take note of market activity across the current week to ascertain if this is a mere coincidence of indicative of the bullish wave ceasing and the cryptocurrency market stagnating or entering a bearish phase once again.

Top 20 Coins Performance 🌐

BTC -0.10% at $22,807.10; ETH -1.44% at $1,620.34.
BNB -0.28% at $304.36; XRP +4.79% at $0.4267; DOGE -2.07% at $0.08802.
ADA -1.93% at $0.3752; MATIC -2.34% at $0.9886; DOT +4.72% at $6.655.
TRX -0.14% at $0.0621; SHIB -2.09% at 0.00001199 LTC +0.94% at $89.64.
SOL -3.37% at $24.12; UNI -2.71% at $6.788; AVAX -2.00% at $17.59.
ATOM -2.96% at $12.98; LINK -0.81% at $7.021.

Topic of the Day: XRP Rallies Amidst Bullish Streak

With the Ripple vs SEC legal proceedings ongoing, bullish sentiment has surrounded the asset as Ripple Labs CEO, Brad Garlinghouse, has stated his positive prospects for the outcome of the proceedings as the possibility of a settlement or official verdict looms nearer. Garlinghouse has stated that he expects a verdict as soon as ‘June’, however, if the judge fails to reach a verdict it is possible that the case will go to court and be put before a jury.

As a result, XRP fans have joined forces and began to extend the recent bullish wave which drove XRP’s price upwards in an effort to further rally the price and their support. As a result, XRP has witnessed over $1 billion in total inflows across the past day, accelerating the market cap to highs not seen for several months, and leading it to a total market cap of $21.72 billion. This has led analysts and investors alike to contemplate the possibility of XRP reaching $0.5 once again, marking a high not seen in the XRP space since October 2023.

XRP Overlook

XRP (XRP) $0.4279 (+5.80%) - Neutral Outlook

Closest daily support zone: 0.4184-0.4221
Closest daily resistance zone: 0.4259-0.4304
Key level: $0.4304 (Monthly High Of January 2023)

Data Courtesy of CoinMarketCap

Currently, XRP is performing remarkably positively and is transgressing against the bearish trend formed across the past four months. As of now, buying pressure appears to have acted as a catalyst for the asset to break through the $0.40 resistance level, leading it to change hands at an average of $0.43. Additionally, XRP has lately been privy to daily gains up to 5% and a total market cap increase of 10%.

Having previously failed to take advantage of any bullish signals triggered by the Ripple VS SEC case, XRP consolidated below $0.40 for several weeks. However, bulls and analysts alike have noted that by breaching the $0.40 threshold, XRP could well be on its way to reclaiming $0.50 and even $1. In order to reclaim the former zone, bulls will need to target $0.45 and mitigate the risk of the asset falling beneath $0.40 in fear that this could invalidate the asset’s bullish momentum.

In addition to this bullish momentum, XRP’s current technical fundamentals signify that the asset is demonstrating a ‘strong buy’ sentiment totaling 16, with moving averages also indicative of this, totaling 14. However, oscillators remain neutral at 8.

As buying pressure and media attention surrounding the asset increases, as well as broader market gains, it is likely that XRP will continue to rally to some extent until the verdict of the Ripple VS SEC case is revealed. However, with the likes of Brad Garlinghouse spurring optimism within the space, it is likely that the XRP community and general crypto bulls will continue to thrive on this growing momentum and continue to pump the asset as a testament of their support.

Daily Resistance Zones:
0.4007-0.4035
0.4185-0.4229
0.4231-0.4304

Daily Support Zones:
0.3985-0.4009
0.4051-0.4116
0.4184-0.4256

Notable headlines

🔹 MakerDAO approves the deployment of $100M USDC on the DeFi protocol Yearn Finance.

🔹 Gemini is reported to owe $3,800,000,000 to their creditors since being bankrupted. It is reported that Gemini owes funds to over 50 creditors including hedge fund manager VanEck and the Stellar Development Foundation.

🔹 The EU is set to impose capital requirements on banks holding crypto after reports emerged that the EU is concluding legislation on implementing the Basel III accords, which set global capital requirements.

🔹 Dogecoin reaches one billion dollars in trading volume leading bulls to anticipate a bull run in the future.

🔹Developers finalize the first ‘shadow fork’ for the Ethereum Shanghai Upgrade and have reported a few minor issues that are in the process of being resolved.

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.