Daily News | Mixed Economic Data and Debt Ceiling Uncertainty, Record TVL of Ethereum L2 Networks, and Bitcoin Profit-Taking
Crypto Daily Digest: Ethereum Layer 2 Networks Hit Record TVL of $10B; Digital Asset Investment Funds See Net Outflows of $30M Amid Bitcoin Profit-Taking
Bitcoin fell below $27,000 for the first time in a month. However, BTC-to-gold ratio continues to rise, indicating that Bitcoin is outperforming safe-haven gold. On the other hand, Ether has also lost momentum since its Shapella upgrade in the middle of last month.
The total value locked (TVL) of Ethereum layer 2 networks reached a record high of $10 billion on April 14, reflecting a growing interest in scaling systems. Although the TVL has since declined to $9.29 billion, it remains a legitimate mechanism for gauging network usage, interest, and value. Zero-knowledge rollups, such as zkSync Era and Polygon zkEVM, have challenged the dominance of Arbitrum One and Optimism in the layer 2 scaling landscape by registering the fastest-growing TVL over the past month.
Last week, digital asset investment funds experienced net Outflows of $30 million, suggesting profit-taking coinciding with Bitcoin reaching $30,000. Bitcoin had Outflows of $53 million after four weeks of inflows, while Ether had inflows of $17 million, indicating investor confidence following the Shanghai network upgrade. Despite the volatility, some analysts see the recent market turbulence as a healthy correction and a sign of investors exercising caution.
The upcoming Federal Open Market Committee (FOMC) meeting is also being closely watched, as the US central bank may raise interest rates by 25 basis points, which could impact the crypto market.
Bitcoin (BTC) $27544 (-0.17%) - Neutral Outlook
By analyzing BTC’s weekly chart using Wyckoff logic, we can identify the JAC (Jump-Across-Creek) area between 25240-24272 as a potential accumulation zone for smart money. Looking at the daily chart, we can observe some bullish activity around the current price, but it’s not strong enough to indicate a trend reversal. In the future, it’s important to keep an eye on the daily 200EMA, which should align with the JAC zone and potentially lead to a rapid recovery.
Overview:
- Closest daily support zone: 27505 - 27150
- Closest daily resistance zone: 27790 - 28019
- Key Level: 26283 (Weekly Close of Dec. 21 - 28, 2020)
Daily Resistance zones
- 27790 - 28019
- 28394 - 28921
- 29096 - 29468
Daily Support zones
- 27505 - 27150
- 26700 - 26283
- 25240 - 24272
Macro: Mixed Signals from Economic Data and Debt Ceiling Uncertainty Leave Markets in Limbo
Global stocks remained subdued on Monday as investors awaited a slew of economic data and corporate earnings reports that may provide insight into the Federal Reserve’s plans for interest rates. In the US, the S&P 500 remained unchanged, while the Nasdaq 100 slipped 0.2%. Meanwhile, Treasury yields dropped, and the dollar weakened against major peers, while oil prices rose.
Shares of Bed Bath & Beyond fell after the company announced plans to close all of its stores, and First Republic Bank dropped in post-market trading despite beating earnings expectations.
Later this week, major tech companies including Microsoft, Meta Platforms, and Amazon.com are set to report their earnings, providing investors with further insight into the state of the market.
In Asia, stock markets were expected to open with little change after US shares ended mixed and Treasury yields fell in low volumes as investors digest corporate earnings and economic data. Equity futures in Japan and Australia climbed, while Hong Kong’s stock futures dropped.
The CBOE VIX index of equity volatility remained near its 17-month year low, leading some strategists to worry that it is providing a false sense of calm. Meanwhile, investors lowered their bets on US interest-rate hikes, with the market pricing now indicating that rates will sit below 4.5% by year-end after peaking in June.
The lack of clear direction in the markets underscores the uncertainty that investors are facing, with economic data showing mixed signals and uncertainty over the debt ceiling persisting. While US manufacturing data was weaker than economists forecast, demand is not falling fast enough to signal an imminent recession, but there are also no indications of a re-acceleration.
Looking ahead, US GDP data is expected to reveal slower growth, and the core PCE deflator, the Fed’s preferred inflation gauge, is expected to show cooled price growth.
