Fundamental & Technical Outlook:

Macro

🥂 Good morning, today is Wednesday, Dec. 07, 2022.

TL;DR

🔹 Bitcoin and Ether continued on their sixth session of stagnant performance. Meanwhile, their correlations with equity indices began to rise since the release of NFP last Friday.

🔹 Tuesday, US equities continued their second-day decline, with futures pointing to a likely third day. Asian and European equities followed despite optimism for China’s accelerated rollback on its zero-Covid policy. In the private sector, JP Morgan announced it will slash 2,000 jobs while Bank of America said they would slow hiring.

🔹 The topic of the Day: Samsung, Huawei, LG lead Metaverse patent race

🔹 Happenings of the Week: Goldman Sachs reportedly looking to buy crypto firms after FTX collapse; UK is finalizing its plan for crypto regulation; European Commission’s leaked taxation directive suggests it could bring in €2.4 billion for the EU; Bitcoin Lightning network’s payment platform Strike enables payments to Nigeria, Kenya and Ghana…

As of Dec. 06 22:58 UTC,

⚡️ Bitcoin (BTC) 24-Hour Change: 16,971 (+0.15%)

⚡️ Ether (ETH) 24-Hour Change: 1,253 (-0.48%)

JP Morgan Slashes Jobs, Economists Foresee Doom

Bitcoin and Ether continue on their sixth day of stagnant performance, effectively strengthening their respective nearest S&R zones. For a closer analysis, look to today’s technical analysis by scrolling down.

US equities slumped for the second consecutive day amid gloomy economic warnings from bank chiefs at a time when concerns about the impacts of Federal Reserve policy on growth and corporate earnings are running rampant. On Tuesday, a rout in tech giants like Apple Inc (AAPL). and Microsoft Corp. (MSFT) weighed heavily on the market, with the Nasdaq 100 down 2% and the S&P 500 suffering a fourth straight loss.

Per IntoTheBlock data, BTC’s correlation coefficients with the DOW, SPX, and IXIC stand at an average of -0.50, up from an average of -0.85 a week ago. The acceleration of the upslope began last Friday following the release of non-farm payrolls and unemployment data from the US. On the other hand, the dollar index (DXY) and volatility index (VIX)’s correlations with BTC stand at 0.47 and 0.29, down from 0.89 and 0.65 a week ago, respectively. Ether’s correlations with the above indices also show similar patterns.

According to a forecast by economist Scott Johnson at Bloomberg, growth in 2023 will be less 2.4%, down from an estimated 3.2% this year and the lowest — excluding the crisis years of 2009 and 2020 — since 1993. The euro area will begin 2023 in a recession while the US will be ending its year one. By contrast, China is projected to expand more than 5%, boosted by a faster-than-expected end to its zero-Covid policy and support for its crisis-hit property market.

Layoffs are also adding to the gloom. On Tuesday, Morgan Stanley announced that it will reduce its global workforce by about 2,000 ahead of a potential US recession, while Bank of America Corp. said it was slowing hiring.

This week, traders are awaiting Friday’s US Producer Price Index -- one of the final pieces of data Fed officials will see before their Dec. 13-14 policy meeting.

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. 06 22:50 UTC

BTC +0.17%; Ether -0.47%.

Asia: Japan +0.24%; Hong Kong -0.40**%**; China +0.02%; India -0.31%.

Europe: London -0.05%; Paris -0.14%; Frankfurt -0.72%.

US Spot Indices: Dow -1.03%; S&P -1.44%; Nasdaq -2.00%.

US Index Futures: Dow -1.04%; S&P -1.46%; Nasdaq -2.03%.

US Two-year Treasury down 3bps at 4.366%.

US Ten-year Treasury down 5bps at 3.531%.

UK Ten-year Government down 1bps at 3.086%.

US Dollar Index +0.29% at 105.19.

FX in 24hrs: GBP: -0.50%; EUR: -0.23%; JPY: +0.15%; CNY: +0.47%.

Gold +0.05% at 1,769; Brent Crude -3.38% at 82.68.

🗓 Catalysts this week

• Monday: US ISM Non-Manufacturing PMI
• Tuesday: Australia RBA Interest Rate Decision, Canada Balance of Trade, US Balance of Trade, Canada PMI
• Wednesday: Australia GDP, China Balance of Trade, India RBI Interest Rate Decision, Canada BoC Interest Rate Decision
• Thursday: Australia Balance of Trade
• Friday: China Inflation Rate, US Producer Price Index, US Michigan Consumer Sentiment
• 
  

🏦 BTC

BTC Weekly timeframe:

• Major Level: 13,965 (Monthly High of Jun. 2019)
• Closest support zone: 16,845 - 16,430
• Key resistance level: 17,085 - 17,715

Analysis as of Dec. 07 - Dec. 11 Session.

Note: The combination of a deteriorating global outlook that may turn into prolonged stagflation and decreasing volume in crypto markets week-over-week has limited BTC’s move up.

Moving forward, if we’d like to see more buying pressures coming in, BTC would have to re-enter the nearest resistance zone. In other words, BTC has to break above last week’s close to establish a new ‘higher-high’ formation on the weekly timeframe.

BTC Weekly Resistance zones

1. 17,085 - 17,715
2. 17,875 - 18,245
3. 18,890 - 19,085

BTC Weekly Support zones

1. 16,845 - 16,430
2. 16,185 - 16,010
3. 15,525 - 15,200

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. 06 21:47 UTC Update:

Bitcoin (BTC) was trading at $16,985, or -0.07% in a 24hr period.

Note: The sluggish performance continues for the sixth day as BTC trades within a tight range between $17,205 - $16,875. The closest S&R zones, likewise, continue to extend their strength well into Tuesday's trading session.

In the sixth session, BTC was practically unchanged from the opening price despite seeing slightly more volume than yesterday, implying a struggle was happening between buyers and sellers.

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
4. 
   

🌐 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. 07 - Dec. 11 Session.

Note: Ether was still holding above the 38.2% ($1,240) monthly Fibonacci Retracement level (measured from Oct. 2020 - Apr. 2021) as of Wednesday, though at this point ETH seemed likely to touch upon the level soon.

There are 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.

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 - 1,240
• Closest resistance zone: 1,280 - 1,300
• Key Level: 1,254 (Weekly close from Jan. 04, 2021 - Jan. 11, 2021)

Dec. 06 21:59 UTC Update:

ETH was trading at $1,256, or -0.25% in a 24hr period.

Note: Like its BTC counterpart, Ether has established a tight trading range between $1,300 - $1,240 in the past six days, which strengthened the nearest S&R zones even more.

As mentioned in the analysis on ETH’s weekly timeframe, the 38.2% monthly Fibonacci Retracement may be a focal point for which Ether moves up and down, which in turn becomes an accumulation period for a larger move.

ETH Daily Resistance zones

1. 1,280 - 1,300
2. 1,310 - 1,330
3. 1,350 - 1,375

ETH Daily Support zones

1. 1,265 - 1,240
2. 1,255 - 1,220
3. 1,215 - 1,195

📌 Today's topic: Samsung, Huawei, LG lead Metaverse patent race

Chinese and South Korean companies are reportedly securing the metaverse hardware patents, as LG and Huawei rising in the ranks with the most Metaverse patents as the electronics industry looks beyond smartphones.

Why it matters: The global metaverse market is expected to reach $996 billion in 2030, registering a compound annual growth rate (CAGR) of 39.8%. The size reached a value of $22.79 billion in 2021, according to GlobalData, a leading data, and analytics company.

Zoom in: Since 2016, LG Electronics has filed the most metaverse patent applications, moving up from 11th place from 2010 to 2015, reports Nikkei Asia. Samsung Electronics held its position in second.

The Takeaway: Display color schemes and semiconductors are among the strengths of South Korean companies, which have quickly established a presence in core components rather than headsets and other finished products.

There’s more: Huawei placed fourth in the ranking with numerous patents related to image and display processing. Moreover, Meta ranked third, Microsoft fifth, Apple, and Intel were among the six American companies to make the top 10, with Sony as the sole Japanese company at sixth.

The Big Picture: The top 20 companies submitted a total of 7,760 patents, with the US accounting for 57%, South Korea at 19%, and China at 12%. However, Japanese firms accounted for only 8%.

Thought bubble: Is the metaverse just a faze at this point? Are companies chiming in just to get a spot at the table? Or is it going to be like the Jobs’ iPhone era where the ‘think different’ mindset repeats itself in history, but this time without a mastermind’s coherent vision?

👁 Happenings of The Week (Dec. 03 - Dec. 06):

📣 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.

🔹 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.

📣 Dec. 06

🔹 Goldman Sachs reportedly looking to buy crypto firms after FTX collapse. Mathew McDermott, an executive at Goldman Sachs, noted that the firm is currently seeing opportunities that are "priced more sensibly" and are already doing its due diligence on some crypto companies.

🔹 Crypto equities down for another day following a deteriorating US outlook: Silvergate -4.6%; Block -2.3%; MicroStrategy -0.2%; Coinbase -7.8%.

🔹 Hedge fund Fir Tree files lawsuit against Grayscale. The firm wants to push the company to address the large discount it trades at by lowering fees and resuming redemptions.

🔹 Digital fashion and collectibles firm RTFKT, owned by Nike, will drop a phygital NFT mint of Nike-inspired shoes with web3 functionality. The shoes are only available to those in the U.S., angering some interested buyers abroad.

🔹 Holders of Bored Apes and Mutant Apes are losing their staked apecoin because they failed to delist their paired NFTs before staking their tokens. In one incident reported by PeckShield, the victim lost 6,400 APE ($26,240) to the trader when the paired NFT was sold.

🔹 Staking for decentralized oracle network Chainlink is now live for early access users and will open fully on Dec. 8. Holders of its native token LINK can now contribute to the network’s security and receive rewards by doing so.

🔹 Ethereum founder Vitalik Buterin weighed in on the capabilities of OpenAI’s ChatGPT for writing code, “At this point, 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. The new collaboration marks Warner Music Group’s latest step into web3, following its tie-up with marketplace giant OpenSea.

🔹 Gaming retailer GameStop is cutting employees in e-commerce product, engineering, and blockchain efforts. The firm joins Meta, Coinbase, and others in the web3 industry to reduce employee headcount.

🔹 Hardware wallet developer Ledger debuts a new device named Stax, designed by iPod inventor Tony Fadell, which features an e-ink touch screen that enables users to manage their crypto and NFTs.

🔹 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. Head Chef Jared Grey stated the project was running out of funds.

🔹 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.

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

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

📣 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).