By Omkar Godbole (All times ET unless indicated otherwise)
The crypto market is currently navigating a period of uncertainty, with the leading cryptocurrency, Bitcoin, taking a momentary breath from its bullish ascent. This pause in upward movement coincides with former President Trump’s renewed threats of tariffs, which are also driving gold prices to new heights while bolstering demand for the U.S. dollar.
Despite this broader stagnation, specific sectors within the market are witnessing remarkable activity. The VIRTUAL token surged by 28% following its recent listing on Upbit, indicating heightened interest from altcoin enthusiasts in South Korea. Additionally, Hyperliquid’s HYPE token has gained 3%, while Litecoin is drawing attention as its perpetual futures open interest on centralized exchanges has climbed to 5.19 million LTC—the highest level seen since December 9, according to Coinglass. This surge suggests the influx of fresh capital into the market, buoyed by growing optimism surrounding a potential spot ETF listing in the U.S.
Meanwhile, stablecoins are witnessing significant shifts. USDC has emerged as the standout performer this month, with its market cap experiencing a 21% growth to reach $53.12 billion—marking its best month since May 2021, based on TradingView data. In contrast, USDT, the dominant player in the stablecoin arena, saw a modest increase of just 1%. Impressively, USDC outperformed Bitcoin’s 10% growth during the same timeframe.
According to insights from IntoTheBlock, USDC’s substantial performance can be attributed to its compliance with Europe’s MiCA regulations, while competitors like USDT are grappling with regulatory challenges. However, it’s essential not to overlook USDT; its market is showing signs of recovery, and the simultaneous growth of USDC is providing a bullish impetus for the broader crypto market.
As we monitor the broader economic landscape, a critical report—the U.S. core PCE, deemed the Federal Reserve’s primary measure of inflation—is set to be released. Expectations point to a hot headline figure, with forecasts suggesting positive improvements in the core reading, which excludes food and energy. This data might provide Bitcoin with the momentum needed to break free from its current price stagnation near $104,000.
Nevertheless, ING has issued warnings that the dollar may remain strong through the weekend. The firm states, “If we don’t receive any news on Canada and Mexico by the end of today, there’s a risk that the dollar could strengthen further as the market starts to price in a higher chance of tariffs being announced tomorrow.” Therefore, it is crucial for market participants to stay vigilant.
What to Watch
In the crypto space:
- January 31: Crypto.com will suspend purchases of several cryptocurrencies in the EU, including USDT, WBTC, and DAI, to comply with MiCA regulations. Withdrawals will remain supported through Q1.
- February 2: The core blockchain Athena hard fork network upgrade (v1.0.14) is scheduled.
- February 4: Pepecoin (PEPE) will undergo halving at block 400,000.
- February 5: Boba Network’s Holocene hard fork network upgrade will take place for its Ethereum-based layer-2 mainnet.
- February 5 (after market close): MicroStrategy (MSTR) will announce Q4 FY 2024 earnings.
- February 6: A network upgrade for Shentu Chain (v2.14.0) is planned.
Macro Developments
On the macroeconomic front:
- January 31, 8:30 a.m.: The U.S. Bureau of Economic Analysis (BEA) will release the December Personal Income and Outlays report.
- February 2, 8:45 p.m.: China’s Caixin will publish the Manufacturing PMI report for January.
Token Events
In governance votes:
- Compound DAO is currently voting on an upgrade from GovernorBravo to OpenZeppelin’s advanced Governor implementation.
- Balancer DAO is considering a token swap initiative involving 200,000 BAL tokens with CoW DAO.
Market Movements
Currently, Bitcoin is down 0.29% since Thursday, with a price of $104,810.50. Ethereum, on the other hand, has seen a 2.39% increase to $3,324. The broader CoinDesk 20 index is down 0.3%. In terms of equities related to crypto:
- MicroStrategy closed at $340.09, slightly down from previous sessions but showing a slight pre-market increase.
- Coinbase Global saw an increase of 3.54%, closing at $301.30, though showing a small dip in pre-market trading.
Technical Analysis
The chart illustrates that $60 has emerged as a strong resistance point for BlackRock’s IBIT exchange-trade fund since December. A continued inability of bulls to maintain a position above this level could indicate potential price pullbacks, setting the stage for future upward momentum.
While You Were Sleeping
Several notable developments occurred overnight:
- Bitcoin remains steady while gold tokens surge as inflation rises.
- Grayscale filed a proposal to convert its XRP Trust into an ETF.
- Reports indicate Trump is advocating for lower interest rates.
As always, vigilance is key in these fluid market conditions. Monitoring economic indicators and developments within the crypto landscape can provide better insights and help navigate the ever-evolving market environment.
