Fidelity Releases 2021 Research Report; Anticipates Central Bank Will Buy BTC in 2022
Getting out of no-man’s land is the name of the game. Ethereum trades above weekly support, but a bounce with follow-through has yet to materialise. Meanwhile, Litecoin has recovered slightly versus Bicoin, but double-digit territory is a possibility should crypto open interest get pillaged again.
On a more positive note, Fidelity released a bullish report for Bitcoin in 2022, aligning their expectations with Nayib Bukele in anticipation of both a country and a central bank adopting bitcoin this year.
Let’s dig in.
Fidelity Digital Assets Publishes 2021 Research Report
Fidelity Digital Assets published their yearly crypto report which covered regulatory and institutional developments, bitcoin mining and general industry expansion.
The researchers said that 2021 was a year that further confirmed digital assets have arrived and are here to stay.
Read the full article here.
The purpose of this newsletter is to provide context to cryptocurrency markets. This analysis takes time to write-up and it’s released every Monday and Wednesday. I am not perfect and this is not a science — nor is this newsletter a signals service. While I cannot promise perfection I do my best to be honest and transparent.
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ETH Is only Bullish Above $4,000
Ethereum/Dollar is exchanging hands around its weekly support at $3,000 — $3,300. The ETH/BTC pair retested ₿0.077 and got rejected, opening the door to further losses. ₿0.069 is the first level of interest, but since ETH/BTC doesn’t trade like the Dollar pair I would take that pivot point with a grain of salt.
[In the last newsletter I said the pair fell below ₿0.07 — this was a typo. Apologies.]
The Dollar pair is on top of support, meaning that it’s not attractive to ditch/short the coin at this stage.
The Relative Strength Index is within a downtrend which could see more downside. However, as with BTC/USD, downside is probably limited. Currently, ETH is pretty much in no-man’s land, waiting for an impulsive directional move to dictate what comes next.
If $3,000 holds on another test, with a potential wick and a daily bullish RSI divergence to go along with it, then bulls will want to enter on that daily deviation. In the meantime, the playground is open to short-term scalpers between $3,300 and $3,000.
That said, the logical conclusion is either to bid weekly support and aim to take profit at the range-midpoint, or to buy strength above $3,300. Failing that, then $2,400 is an area of interest.
But the ETH/BTC chart is a headwind in my view. While anything is possible, it would be naïve to expect this pair to break all time highs under current market conditions i.e. bleeding market against the USD and BTC.
All in all, the market is oversold in dollar terms and a bounce will probably materialise by the end of January. Admittedly, a lot can happen between now and then and there’s no shame in not knowing or not having conviction if the setup doesn’t tick your boxes (nobody has a crystal ball).
Still, bulls are looking for a place to take a stand, and where better to do it than at weekly support for Ethereum?
Can LTC form a Macro bottom near $137?
Litecoin is ranging at the lows, currently exchanging hands at $136. As with the rest of the market, Litecoin/Dollar is trying to find a bottom. Meanwhile, LTC/BTC is performing its ritual ‘mountain range’ pattern where it retraces all gains against bitcoin within the span of a day. Still, ₿0.003 appears to be a resilient level so far, and with renewed strength, dev. updates and increasing decentralisation in the ecosystem, there’s a lot to be excited about.
So far, sellers rejected the coin at $153, and it retreated to the pivotal 2019 high ($137). If this level fails to hold, I could see the coin dump back to $120, and perhaps even into double-digit territory. The latter scenario could happen if crypto futures open interest gets ravaged again and that would be the bottom for a good long while, most likely. Cascading liquidations typically dictate the absolute bottom.
Since Litecoin is also in no-man’s land, however, it’s ultimately a ‘wait and see’ approach.
There’s no denying that the technical picture looks dreadful, generally. Bulls are effectively lying in wait for a strong cash injection to dictate an “official” bottom. When it’s your own money on the line, even billionaires tend to hesitate to be the first ones through the door.
That said, sellers are close to getting exhausted — that much is clear from proxy-bitcoin on-chain indicators which we covered on Monday. Recent data (14th) from Santiment analytics also indicate that big players have been scooping up litecoin for months. This tells me one thing and one thing only: whales are quietly filling their bags in preparation for a trend reversal.
As you know from my twitter feed, I too am accumulating litecoin.
Catch you later.
p.s. This is my opinion. It is not financial advice.
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