After a turbulent few weeks in the crypto markets following the spot bitcoin ETF approvals, things have certainly slowed down.
Daily spot ETF volumes declined last week versus the week before. The daily average for last week was $1.53billion in volume, whereas the week prior saw average daily volumes of $2.21billion.
Inflows into the spot ETFs have slowed, and whilst GBTC continues to bleed, seeing a drop of approximately 56,100 BTC from its total holdings over the last week, the outflows, which some analysts have cited as one of the main causes for the recent price decline, have slowed too.
With this, bitcoin has found some support around the $40,000 mark and has started to gain a little bit of upwards momentum again. Currently bitcoin at the time of writing is trading at $42,958 on the eToro platform.
Going into a busy week for monetary policy and economic data releases, we wait to see if prices can push up further, or if this is just a short term rally and we’re in store for another move lower.
WEEK AHEAD
The FOMC (Federal Market Open Committee) statement and press conference with Federal Reserve Chairman Jerome Powell on Wednesday will be one to watch.
Markets will be looking for any clues into planned interest rate cuts by the Fed, how many we could see this year and when they could start.
We’ve seen in the past that in times of loose monetary policy, cryptoasset prices have performed significantly well. If the conference on Wednesday is not to the market’s liking, and the Fed indicates they’ll be keeping their foot on the brake for longer we could see a sell-off. Conversely, more optimistic language in the press conference could provide fuel for cryptoassets to push higher.
MOVERS
Chiliz (CHZ) was one the best performing cryptoassets last week, gaining 15% following the announcement of the digital wallet provider Ramper integrating with the Chiliz chain.
The collaboration simplifies user engagement within the Chiliz ecosystem and opens Chiliz’s decentralized sports and entertainment to more people.
Currently CHZ is trading at $0.10336 on the eToro platform.
EYE-CATCHING STORIES
Ethereum – Dencun network upgrade gets activation dates for final testnets
After successfully going live on the Goerli testnet, the anticipated Dencun upgrade to Ethereum is now scheduled for the two remaining testnets, Sepolia and Holesky, 30th January and 7th February respectively.
After implementing the Dencun upgrade on these two testnets, the Etheruem mainnet would be next.
The Dencun upgrade includes several changes aimed at reducing transaction ‘gas’ fees and increasing the scalability and efficiency of the network.
SEC delays Grayscale’s spot ethereum (ETH) application
A week on from delaying Fidelity’s spot ethereum ETF application, the SEC has again delayed its decision on the Grayscale spot ethereum ETF application.
Interestingly, the SEC specifically asked whether Ethereum’s proof-of-stake consensus mechanism and “concentration of control or influence by a few individuals or entities” could bring up unique concerns to make the fund susceptible to fraud and manipulation.
The crypto community will be really looking to the 23rd May, where the SEC must give its final decision, either to approve or reject a competing spot ethereum ETF application from VanEck.
Like we saw with the spot bitcoin ETF applications, if the VanEck ethereum ETF was approved come May, it’s likely that all of the current spot ethereum applications will be approved at the same time as well.
Simon Peters, eToro cryptocurrency analyst
