🥂 Good morning, today is Friday, Dec. 09, 2022.

TL;DR

🔹 Crypto markets rose Thursday following a sudden recoup of losses in US equity markets. Bitcoin and Ether’s correlation coefficients with global equity indices returned to positive. VIX and DXY’s correlations to BTC and ETH, on the other hand, returned to negative yesterday.

🔹 Traders are awaiting key inflation figures, such as the PPI today and CPI next Tuesday, for clues on whether Federal Reserve officials will be able to notch down their aggressive tightening campaign on Wednesday.

🔹 The topic of the Day: Ethereum Shanghai Incoming

🔹 Happenings of the Week: Hong Kong passes an amendment introducing VASP licensing regime; Ethereum developers target March 2023 for Shanghai hard fork; Ampleforth developer debuts Ethereum-based inflation-resistant token called Spot; Gnosis Chain activates its own version of The Merge, transitions to proof-of-stake network…

As of Dec. 08 23:12 UTC,

⚡️ Bitcoin (BTC) 24-Hour Change: 17,245 (+2.40%)

⚡️ Ether (ETH) 24-Hour Change: 1,285 (+4.41%)

All Bets Are In, Get Ready For PPI, CPI & FOMC

Crypto markets were closely tracking TradFi as of late. US equity markets recouped some losses on Thursday and as a result, Bitcoin and Ether both rose from their respective support zones and into their closest resistance zones, effectively aiding most of the crypto markets in returning to their previous rangebound areas. For a detailed analysis going into the Friday and the weekend, scroll down to the technical analysis section of this article.

On Thursday, US equities climbed after a five-day slide, with traders awaiting key inflation figures, such as the PPI today and CPI next Tuesday, for clues on whether Federal Reserve officials will be able to notch down their aggressive tightening campaign. US equity indices’ correlation coefficients to BTC, per IntoTheBlock data, stood at an average of 0, up from an average of -0.85 a week ago.

The PPI in October cooled more than expected. In the run-up to the numbers, a separate report showed some signs the labor market is slightly cooling, with continuing jobless claims climbing to the highest since early February. However, according to Goldman Sachs’ Peter Oppenheimer, investor optimism that inflation has peaked is misguided as a potential spike in energy costs in 2023 could keep prices elevated and interest rates high.

As the equity market rebounded, the Cboe Volatility Index (VIX) fell to around 22, yet derivatives strategists at JPMorgan Chase say the VIX has further room to advance. As of Dec. 08, BTC’s correlation coefficients with VIX and the dollar index (DXY) stood at -0.07 and -0.32, down from 0.59 and 0.85 a week ago, per IntoTheBlock data.

Elsewhere, Asian equities are poised to rise following US spot’s ascension, and global equity futures point in the same direction. Meanwhile, the consensus is for China’s inflation indexes to have headed down last month. Comments from Li Keqiang should support sentiment, with the Chinese premier saying economic growth will “keep picking up.”

In related news, Hong Kong stocks jumped on local media reports that Covid rules would be relaxed, with the official announcement on shortened isolation periods coming after the market closed. The Hang Seng Index rose as much as 3.8%, erasing Wednesday’s selloff.

Next week, an update on the consumer price index (a.k.a. US inflation data) is due next Tuesday, right before the Fed’s final policy meeting on Wednesday. Traders beware.

P.S. If you’d like us to cover any specific macro data, or to expand upon technical analysis on your favorite coin, feel free to drop a message in our Reddit community. - Peter L.

💡 Today's Markets at Dec. 08 22:58 UTC

BTC +2.06%; Ether +4.26%.

Asia: Japan -0.40%; Hong Kong +3.38%; China -0.07%; India +0.26%.

Europe: London -0.28%; Paris -0.20%; Frankfurt +0.02%.

US Spot Indices: Dow +0.55%; S&P +0.75%; Nasdaq +1.13%.

US Index Futures: Dow +0.53%; S&P +0.74%; Nasdaq +1.18%.

US Two-year Treasury up 5bps at 4.314%.

US Ten-year Treasury up 7bps at 3.489%.

UK Ten-year Government up 5bps at 3.095%.

US Dollar Index -0.37% at 104.48.

FX in 24hrs: GBP: +0.23%; EUR: +0.50%; JPY: +0.03%; CNY: +0.41%.

Gold +0.20% at 1,789; Brent Crude -2.75% at 77.17.

🗓 Catalysts remaining this week

• Friday: China Inflation Rate, US Producer Price Index, US Michigan Consumer Sentiment

🧠 Catalysts next week

• Monday: UK GDP, Australia Westpac Consumer Confidence Index
• Tuesday: Australia NAB Business Confidence, UK Unemployment Claimant Count, Germany ZEW Economic Sentiment Index, US Inflation Rate, Japan Tankan Large Manufacturers Index
• Wednesday: UK Inflation Rate, UK PPI, US Fed Interest Rate Decision, US FOMC Projections, US Fed Press Conference, Japan Balance of Trade
• Thursday: China Industrial Production, US Retail Sales, US Jobless Claims, ECB Press Conference
• Friday: UK GfK Consumer Confidence, UK Retail Sales

🏦 BTC

BTC Weekly timeframe:

• Major Level: 13,965 (Monthly High of Jun. 2019)
• Closest support zone: 17,090 - 16,880
• Key resistance zone: 17,175 - 17,450

Analysis as of Dec. 09 - Dec. 11 Session.

Note: This week has been choppy, to say the least, but within expectations as volumes were down while global markets, particularly those of the US markets, remained uncertain ahead of Friday’s Producer Price Index data release.

For now, BTC’s outlook remained unchanged since last Friday. For it to remain on a positive trajectory going into next week, BTC would have to close within the closest resistance zone before making a new candle on the weekly timeframe.

In other words, BTC would have to make a “higher-high” formation by the week’s end. The deeper it closes within the zone, the higher the likelihood of an uptrend continuation going into next week.

If BTC closes within the nearest support zone, next week may continue to be choppy, and performance stagnant. In the unlikely case that BTC closes below the support zone, it would break the previous “higher-high” formation of the last two weeks -- an indication of the bears gaining an advantage and therefore provides a sell signal.

BTC Weekly Resistance zones

1. 17,175 - 17,450
2. 17,640 - 17,700
3. 17,815 - 18,025

BTC Weekly Support zones

1. 17,090 - 16,880
2. 16,690 - 16,430
3. 16,185 - 16,010

BTC Daily Timeframe:

• Closest support zone: 16,875 - 16,635
• Closest resistance zone: 16,990 - 17,205
• Key Level: 15,952 (Weekly Close Between Nov. 02 - 09, 2020)

Dec. 08 21:37 UTC Update:

Bitcoin (BTC) was trading at $17,184, or +2.10% in a 24hr period.

Note: Considering there are a few hours left until BTC makes a new candle on the daily timeframe, if it’s able to close within the closest resistance zone, then Friday can potentially become quite bullish as BTC would establish a “higher-high” formation on the daily timeframe.

If BTC is able to remain within the resistance zone by Friday’s close, then there are two scenarios of how it might play out over the weekend.

One, BTC continues to remain choppy due to a lack of volume and lack of capital coming from TradFi as most markets are going to be closed on weekends. Two, BTC bulls take advantage of the momentum and continue to push BTC deeper into higher resistance zones in order to make a “higher-high” formation candle more obvious on the weekly timeframe.

On the contrary, if we fail to see BTC close within the resistance zone by Thursday’s close, then Friday could potentially put BTC back into its previous range -- $17,205 - $16,745.

Whichever the case, it is important to remember Friday’s PPI data can potentially disrupt the US markets, which in turn affect the crypto markets.

BTC Daily Resistance zones

1. 16,990 - 17,205
2. 17,370 - 17,575
3. 17,645 - 17,805

BTC Daily Support zones

1. 16,875 - 16,635
2. 16,300 - 16,010
3. 15,860 - 15,780

🌐 ETH

Weekly Timeframe

• Major Level - 757 (Monthly High of Dec. 2020)
• Closest support zone: 1,265 - 1,220
• Key resistance zone: 1,280 - 1,330

Analysis as of Dec. 09 - Dec. 11 Session.

Note: Per analysis from yesterday, “As of Thursday, ETH has broken below the 38.2% monthly Fibonacci level, though the outlook hasn’t changed. There are still three ways we could go about in terms of reacting to the Fibonacci level.

1. ETH pushes through and targets the 50% monthly Fibonacci level ($965).
2. ETH rebounds and targets the 23.6% monthly Fibonacci level ($1,695).
3. ETH remains stagnant and moves up and down between the 38.2% Fibonacci level ($1,240), which in turn becomes an accumulation period in preparation for a bigger move.”

The target levels haven’t changed. As Thursday is coming to an end, it’s quite obvious that Ether is unlikely to break below the 38.2% monthly Fibonacci level by EOD. However, the latest decline has put Ether in a peculiar position even after its latest ascent whereby the price of Ether is stuck in a gap between the two nearest S&R zones, as of this writing.

The good news is Ether will be heavily affected by Bitcoin, and vice versa, implying as long as one of them is able to close within the closest resistance zone, then Ether going into Friday can potentially become quite bullish, or at least until the US markets open and before PPI data release.

To remain on a positive trajectory going into next week, not only does Ether have to remain above the 38.2% monthly Fibonacci level, but it must also establish a “higher-high” formation by the week’s end.

ETH Weekly Resistance zones

1. 1,280 - 1,330
2. 1,345 - 1,390
3. 1,415 - 1,470

ETH Weekly Support zones

1. 1,265 - 1,220
2. 1,155 - 1,110
3. 1,060 - 1,035

ETH Daily Timeframe

• Closest support zone: 1,265 - 1,255
• Closest resistance zone: 1,280 - 1,300
• Key Level: 1,254 (Weekly close from Jan. 04, 2021 - Jan. 11, 2021)

Dec. 08 22:04 UTC Update:

ETH was trading at $1,290, or +4.04% in a 24hr period.

Note: There are less than two hours until Ether closes its Thursday daily candle and the likelihood of it maintaining a “higher-high” formation is quite high, although whether or not it can break above the closest resistance zone is anyone’s guess.

If it does, however, then Friday can become potentially quite bullish; the deeper the price of Ether closes within the resistance zone, the higher the likelihood.

On the other hand, Friday’s US economic data can potentially become quite disruptive, so traders beware. In addition, next week we’ll see inflation data coming from the US -- right before FOMC’s interest rate decision. Volatile session ahead indeed.

ETH Daily Resistance zones

1. 1,280 - 1,300
2. 1,310 - 1,315
3. 1,325 - 1,330

ETH Daily Support zones

1. 1,265 - 1,255
2. 1,245 - 1,220
3. 1,215 - 1,195

📌 Today's topic: Ethereum Shanghai Incoming

What’s happening: Since the Ethereum network transitioned to the proof-of-stake mining model which took place on Sep. 15, 2022, some ETH stakers had been nagging the team to give a status update on its Shanghai upgrade, which according to one of its developers who stated previously in the Ethereum Discord server that the upgrade was not a priority. Some stakers got concerned.

Why it matters: This next major upgrade for the network will enable validators to withdraw staked ether. The tentative timeline for the upgrade was set by the core developers at a meeting on Dec. 08. Ethereum Improvement Proposal (EIP) 4895 or Shanghai will likely provide the network with an absent feature of withdrawing staked ether.

What they’re saying: “Withdrawals will be enabled with Shanghai currently planned in March on the mainnet if everything goes as planned,” said Pooja Ranjan, a project manager at Ethereum Cat Herders to The Block.

But, but, but: The expected timeframe is not fixed and can vary depending on the issues that the team may face, including other possible difficulties. The hard fork update might also make suggestions to improve the Ethereum Virtual Machine and address scalability issues. On Oct 18, the upgrade known as Shandong went live on the testnet.

Zoom in: The Shanghai version explores three critical Ethereum issues. It makes changes to the EVM object format, Beacon Chain withdrawals, and reduces L2 fees.

The bottom line: As per the recent details from the core developers, the expected date for the update has been set for March 2023, for now.

👁 Happenings of The Week (Dec. 03 - Dec. 08):

📣 Notables

🔹 SBF: “…once I have finished learning and reviewing what happened…I'm not sure that will happen by the 13th. But when it does, I will testify (before congress).”

🔸 12.05: Congresswoman Maxine Waters countered SBF’s statement and said he knows enough to testify before the House Financial Services Committee.

🔸 12.06: SBF hires Mark Cohen, a high-win-rate attorney who represented Ghislaine Maxwell, former wife of the infamous sex trafficker Jeffrey Epstein.

🔸 12.07: Senior members for the House Financial Services Committee are weighing whether to subpoena former FTX CEO SBF.

🔸 12.08: The Feds is investigating FTX founder SBF for possible market manipulation of TerraUSD and Luna.

🔹 Through MiCA, all EU member states will have the power to “bring down advertisements and websites for unauthorized crypto venues” -- unauthorized included all offshore crypto companies.

🔹 UK is finalizing its plan for crypto regulation. According to the Financial Times, those changes include, “limits on foreign companies selling into the UK, provisions for how to deal with the collapse of companies, and restrictions on advertising products.”

🔹 A leaked draft of the European Commission’s new taxation directive, set to be published later this week, suggests it could bring in €2.4 billion for the EU and seeks to close the “regulatory gap” for crypto users by removing tax evasion opportunities as well as to ensure member states avoid a tax shortfall.

🔹 Paraguay legislature strikes down crypto mining bill. Specifically, the bill would cap electricity rates for mining by recognizing it as industrial activity.

🔹 Kazakhstan, which boasts one of the world’s largest crypto mining operations, approved the second reading of a bill "On the Digital Assets of the Republic of Kazakhstan.” The new legislation would put in new licensing regimes for crypto miners. In addition, miners would also have to purchase their electricity from the shared grid at market rates through energy provider Korem.

🔹 Bank of Russia wants to ban miners from selling crypto to Russians. The Russian central bank supports the idea of legalizing the crypto mining business, but only if miners sell their coins to non-residents of Russia.

🔹 A newly introduced US bill, if passed, would prompt U.S environmental agencies to assess greenhouse gas emissions of crypto miners and report findings to Congress.

🔹 The Securities and Exchange Commission is pressing firms to disclose if they have financial exposure to crypto assets or companies whose business and financial status could be affected by reverberations in digital asset markets.

🔹 US Senators Elizabeth Warren and Tina Smith want details from the Federal Reserve and other federal regulators on U.S. banks’ exposure to cryptocurrencies. Questions include Alameda Research’s investment in Washington state-based Moonstone Bank.

🔹 Companies offering EU residents crypto services will need to report on transactions to tax authorities. The European Commission aims for the new rules to be enforced on Jan 1. 2026.

🔹 Hong Kong passes an amendment introducing VASP (virtual asset service providers) licensing regime. The new rules for VASPs are scheduled to commence on June 1, 2023.

📣 Dec. 08

🔹 PayPal expands crypto services to Luxembourg. Back in June, the company rolled out new features allowing users to transfer crypto between PayPal and other wallets.

🔹 Nouns DAO $123K donation to ZachXBT scrapped, vote to be repeated. ZachXBT is a pseudonymous Twitter personality whose work exposes fraudulent activities in the crypto space.

🔹 Gnosis Chain activates its own version of The Merge, transitions to proof-of-stake network. Gnosis Chain’s validator count has subsequently increased from 20 to 100,000.

🔹 Owners of Decentraland virtual land NFTs can now rent out their property on the platform. Renters pay each day using MANA, the platform’s main cryptocurrency.

🔹 Ethereum developers target March 2023 for Shanghai hard fork. The planned change will make it possible to withdraw ether staked with network validators.

🔹 Solana-based NFT platform Magic Eden has hired its first Chief Gaming Officer Chris Akhavan. Previously, Akhavan had worked as Chief Revenue Officer at Glu Mobile — which was acquired by Electronic Arts in 2021 for $2.1 billion.

🔹 Billion-dollar Aptos Labs lawsuit resolved. Shari Glazer had previously claimed Aptos CEO Mo Shaikh conspired to deprive her of a stake in the company.

🔹 Starbucks NFTs are now available to beta testers. The coffee conglomerate is also launching a marketplace powered by Nifty Gateway in 2023.

🔹 Grayscale's GBTC discount to NAV hits all-time low of 47%. Concerns over Grayscale’s sister firm Genesis have put pressure on the fund over the past few weeks.

🔹 Ampleforth developer debuts Ethereum-based inflation-resistant token called Spot. Spot tokens are a freely redeemable claim on a basket of on-chain collateral.

🔹 Ren Protocol warned its users of potential risk tied to loss of assets as it plans to shutter version 1.0. The team said that after the version 1.0 is retired, it’s possible its holders may not be able to recover assets.

🔹 Cosmos' largest DEX Osmosis launches a stableswap. The solution aims to let traders swap large amounts of stablecoins with minimum price impact.

🔹 Blur offers some NFT traders 50% refund after a UI 'bug' that caused a user to lose 70 ether. The move comes days after the platform’s second airdrop to users.

🔹 Nomad to restart bridge after $190 million hack in August. The team has asked users to go through KYC verification to let them bridge back assets to Ethereum.

🔹 Japanese bank SMFG (Sumitomo Mitsui Financial Group) is planning a trial of soulbound tokens for identity verification via a business partnership with HashPort Group. They may also work on NFTs and web3 infrastructure development.

🔹 Bitcoin miner Marathon explores Compute North bid. The mining firm saw poor Q3 earnings which were partially tied to a $39 million impairment charge linked to Compute North.

🔹 Celsius must return $44 million in crypto to users, Chief Bankruptcy Judge Martin Glenn orders. Celsius moved more than $200,000 in assets into custody accounts before its bankruptcy this summer, which opened the possibility that it can claim ownership of those funds.

📣 Dec. 07

🔹 Crypto-friendly Signature Bank is placing caps on deposits from clients in the digital assets industry.

🔹 Canadian pension plan CPP Investments ended a research effort into crypto markets.

🔹 Fintech firm Plaid laid off about 260 employees due in part to the “current economic slowdown.”

🔹 Coinbase CEO Brian Armstrong expects revenue to fall 50% or more from $7 billion of revenue in 2021.

🔹 FBI arrested blockchain startup CTO Rikesh Thapa, a former executive at Blockparty, for alleged wire fraud.

🔹 ConstitutionDAO2 selling NFTs in a fresh bid to buy a US Constitution copy.

🔹 ImmutableX NFTs are now available on Nifty Gateway.

🔹 Hashflow partners with Wormhole for cheaper cross-chain crypto swaps.

🔹 Video game company Atari is collaborating with Pixels for print-on-demand NFT artwork.

🔹 Crypto infrastructure firm Blockstream is looking to raise fresh funds at a lower valuation, stripping it of its previous unicorn status valued at $3.2 billion.

🔹 Standard Chartered subsidiary Zodia Custody rolled out a new service to help protect client assets from exchange insolvency.

🔹 Old-school media player Winamp now supports Ethereum and Polygon-based music NFTs in its latest desktop update.

🔹 North Korean hackers created a bogus crypto exchange that infects users’ internet-connected devices with malware, according to security provider Volexity.

🔹 Ethereum’s energy switch saves as much electricity as the entirety of Ireland uses.

🔹 Over the last 30 days 200,000 BTC worth ~$3.4 billion have been moved off exchanges.

📣 Dec. 06

🔹 Goldman Sachs reportedly looking to buy crypto firms after FTX collapse.

🔹 Hedge fund Fir Tree files lawsuit against Grayscale.

🔹 Digital fashion and collectibles firm RTFKT, owned by Nike, will drop a phygital NFT mint of Nike-inspired shoes with web3 functionality.

🔹 Holders of Bored Apes and Mutant Apes are losing their staked apecoin because they failed to delist their paired NFTs before staking their tokens.

🔹 Staking for decentralized oracle network Chainlink is now live for early access users and will open fully on Dec. 8.

🔹 Vitalik Buterin: “At this point, (Open)AI is quite far from being a substitute for human programmers.”

🔹 Warner Music Group and Polygon have partnered with LGND.io on a new web3 music project.

🔹 Gaming retailer GameStop is cutting employees in e-commerce product, engineering, and blockchain efforts.

🔹 Hardware wallet developer Ledger debuts a new device named Stax, designed by iPod inventor Tony Fadell.

🔹 ConsenSys intends to store MetaMask user data for only seven days amid growing concerns about user data privacy.

🔹 a16z appoints ex-CFTC commissioner Quintenz as head of policy.

🔹 SushiSwap proposes to direct 100% of xSUSHI revenue to its treasury wallet.

🔹 Bitcoin Lightning network’s payment platform Strike enables payments to Nigeria, Kenya and Ghana for U.S. users through its “Send Globally” feature.

📣 Dec. 05

🔹 FTC told Bloomberg it is investigating several unnamed crypto companies for alleged deceptive advertising practices but didn’t provide any further details.

🔹 Nexus Mutual expects a $3 million loss from exposure to Orthogonal Trading’s $36 million default on Maple Finance.

🔹 Aave acquired Sonar to integrate its decentralized identity platform, Lens Protocol.

🔹 Coca-Cola has teamed up with Crypto dot com to release a collection of 10,000 World Cup NFTs based on heatmaps from matches.

🔹 Twitter’s Web app shows a potential new ‘Twitter Coin’ and Musk noted Twitter will need crypto payments.

🔹 Silvergate stock (NYSE:SI) down 8.5% on Monday. The bank disclosed FTX deposits made up nearly 10% of its $11.9 billion in deposits from digital asset customers.

📣 Dec. 04

🔹 Reddit Collectible Avatar minting hits all-time high.

🔹 Some CEXes are cutting jobs as the bear market deepens. Sunday, Bybit CEO announced it will be reducing its workforce. Monday, Swyftx has announced 90 job cuts in its second round of layoffs.

🔹 Genesis owes $900 million to another group of assorted creditors on top of the earlier reported $900 million to customers of Gemini, which tallies up to $1.8 billion.

📣 Dec. 03

🔹 Crypto derivatives exchange LedgerX (formerly known as FTX US Derivatives) is for sale.

🔹 Crypto brokerage Genesis owned by Digital Currency Group (DCG) owes $900 million to customers of crypto exchange Gemini.

🔹 Web Browser Opera will roll out an NFT creation tool next January.

📣 This week’s fundraising activities include but are not limited to:

🔹 Crypto hardware wallet maker Ngrave aims to raise $15 million led by Binance Labs.

🔹 DeFI Derivatives Protocol Perennial raised $12 million in seed funding in a round co-led by Polychain Capital and Variant.

🔹 Cybersecurity startup Cyvers raised $8 million in a seed round led by Elron Ventures.

🔹 Decentralized video platform Shibuya has raised $6.9 million in seed funding led by a16z. The platform's main entertainment offering is a serialized show called White Rabbit, which its co-founder Emily Yang previously described as a mix of anime, the English drama Black Mirror and web3.

🔹 Uniswap-based perpetual options protocol Panoptic raised $4.5 million led by Gumi Cryptos Capital.

🔹 Game development platform The Mirror raised $2.3 million in pre-seed funding in a round led by Founders Fund.

📣 This week’s on-chain criminal activities include but are not limited to:

🔹 Infrastructure provider Ankr and stablecoin issuer Helio Protocol lost a total of $20 million in two attacks, according to on-chain analysis by security firm BlockSec. The first attack targeted a liquid staking token product run by Ankr, resulting in a loss of more than $5 million. In the second attack, someone acquired some 183,000 aBNBc tokens with 10 BNB ($2,900), which then were deposited into a BNB Chain-based stablecoin issuer Helio Protocol to drain funds. The attacker was able to borrow $16 million in the HAY stablecoin with a small amount of aBNBc collateral and subsequently swapped their HAY stablecoin for $15 million Binance USD (BUSD).